Stocks Finish Slightly Lower
Stocks finished lower Tuesday, as economic and political worries pressured major indexes in thin trading. Investors weighed news that the U.S. and Great Britain may delay a U.N. Security Council vote on an ultimatum for Iraq to disarm or face war because six members are undecided on the vote.
The Dow Jones industrial average ended down 44.12 points, or 0.58%, to 7,524.06. The broader Standard & Poor's 500-stock index fell 6.75 points, or 0.84%, to 800.73. Meanwhile, the tech-laden Nasdaq composite index lost 6.9 points, or 0.54%, to 1,271.47.
Lingering worries about war and economic growth continued to haunt the market. Defense Secretary Donald Rumsfeld, in more U.S. posturing ahead of a possible war, warned that Saddam Hussein is likely to use his own citizens as human shields if the U.S. military conducts bombing and missile raids against Iraqi military sites.
However, Washington's willingness to change its U.N. resolution authorizing war against Iraq in order to gain more support from Security Council members, combined with some bargain-hunting following Monday's fall to five-month lows, served to prop up stocks early in the session.
In economic news Tuesday, U.S. wholesale inventories fell 0.2% in January following a 0.8% gain in December. Auto sales were a major drag on the report, notes economic research outfit MMS International. Sales rose 1.0% after a revised 0.4% decline in December (from -0.8% previously). The inventory-to-sales ratio fell to 1.21 from a revised 1.22 (from 1.23 previously).
The key economic data releases will come toward the end of this week. Initial jobless claims, February retail sales, and import prices will be due Thursday. On Friday, investors will get January business inventories data, February producer prices, industrial production, and preliminary figures for the University of Michigan Consumer sentiment survey for March.
Plenty of corporate news helped to fray investors' nerves. AMR Corp.'s (AMR ) American Airlines is talking to lenders about raising as much as $2 billion in financing should the carrier file for bankruptcy protection, the New York Times said, citing an unnamed banker.
Rival Delta Air Lines (DAL ) said it expects cash flow from operations to be negative in the first quarter. Delta had previously predicted cash flow would be positive.
In the drug industry, biotechnology drugmaker ImClone Systems' (IMCL ) former CEO Sam Waksal has reached a deal with the SEC over the insider trading charges he faced. He will be barred from acting as a company officer for life and must pay $800,000 in fines.
Separetely, King Pharmaceuticals Inc. (KG ), the worst-performing drug stock in the Standard & Poor's 500 Index last year, said it got a subpoena from the U.S. Securities and Exchange Commission for information on pricing and rebates. King shares tumbled as much as 27%.
Cellphone maker Nokia (NOK ) may be under pressure after the mobile-phone maker said first-quarter earnings will be at the low end of its previous forecast.
Corning (GLW ), the fiber optics maker, expects its first-quarter loss, before certain costs, to narrow to a range of 1 cent to 4 cents a share. But Corning also anticipates that it will have a profitable quarter in 2003.
Aerospace and industrial products company Goodrich (GR ) reduced its forecast for profit this year to be $1.60 to $1.75 a share, excluding costs, from an earlier forecast of $1.70 to $1.85.
Appliance maker Maytag (MYG ) said sales and earnings will not meet expectations, citing weaker sales of Hoover products and "anxiety" among consumers.
Wednesday's session is expected to bring earnings reports from retailers Foot Locker (Z ), Talbot's (TLB ), and Sports Authority (TSA ).
Prices of U.S. Treasury issues ended mixed. The 30-year note rose in price, while shorter-term notes all fell slightly. The benchmark 10-year note's yield was 3.57%.
After six consecutive days of curve steepening, traders booked profits as the safe haven bid stalled out, according to MMS.
European markets ended down amid continuing war jitters. In London, the Financial Times-Stock Exchange 100 index fell 5 points, or 0.25%, to 3,452.70. In Germany, the DAX index fell 23.74 points, or 1.02%, to 2,305.30, while France's CAC 40 index lost 20.19 points, or 0.80%, to 2,493.42.
Asian markets finished lower, most notably in Japan, pressured by North Korea's missile launch test into the Sea of Japan last weekend. In Tokyo, the Nikkei 225 index fell 179.83 points, or 2.24%, to close at 7,862.43. The Nikkei has reached a 20-year low point.
In Hong Kong, the benchmark Hang Seng index declined 1.94 points, or 0.02%, to close at 8,859.93.