Stocks Finish Lower
Stocks finished in the red as a spike in oil prices and profit concerns at tech companies put a damper on the major indexes.
The Dow Jones industrial average declined 63.49 points, or 0.62%, to 10,219.34. The broader Standard & Poor's 500 index fell 9.20 points, or 0.82%, to 1,116.18. The tech-heavy Nasdaq composite index lost 43.23 points, or 2.15%, to 1,963.43.
Crude oil prices Tuesday rose to one-month highs -- above $39 a barrel. Production disruptions in Iraq and Nigeria raised worries about supply security.
Technology shares were led lower by a profit warning from Conexant Systems (CNXT ). The communications chipmaker cut its quarterly guidance, citing weak demand for wireless local area network products amid competition from Taiwan.
A brokerage downgrade of semiconductor names also weighed on the sector. Lehman Brothers cut its opinions on names including Applied Micro Circuits (AMCC ), PMC-Sierra (PMCS ) and Vitesse Semiconductor (VTSS ).
In other technology news, Veritas Software (VRTS ) said sluggish U.S. sales of business software toward the end of June would weigh on the second-quarter's earnings.
Meantime, an article in Barron's helped lift shares in Dow member Boeing (BA ). The article said the stock could rise amid the appointment of a new CEO and its first new plane in 10 years.
On the economic front, the Institute of Supply Management's index of financial services, construction, retail and other nonmanufacturing business fell to 59.9 in June, down from 65.2 in May. The markets expected a decline to 64.0.
"Although down, that is still a high level," say economists at UBS, who note the details of the report were stronger than the headlines suggested. New orders, employment, and prices paid all rose relative to May.
Indeed, a reading over 50 signifies growth. However, the slower pace from month to month reinforces expectations the Federal Reserve will avoid raising interest rates too quickly this year.
On Wednesday, investors wil get earnings updates from Alcoa, (AA ) Genentech (DNA ), and Yahoo! (YHOO ).
Wednesday will be light in economic news, but Thursday brings updates on weekly initial jobless claims and June retail store sales. Friday brings a fresh reading on wholesale trade.
More earnings updates come at the end of the week. On Friday, General Electric (GE ) and Abbott Labs (ABT ) unveil their latest income statements.
Treasuries finished lower in price after several straight days of gains amid the weaker-than-expected June update on the ISM services index.
European stock markets finished lower Tuesday. London's Financial Times-Stock Exchange 100 index fell for a sixth straight session. The index lost 32.6 points, or 0.74%, to 4,370.7, amid weakness in banking concerns.
Germany's DAX index lost 50.85 points, or 1.27%, to 3,944.88, led by losses in the insurance sector. In Paris, the CAC 40 fell 27.5 points, or 0.75%, to 3,660.68.
Asian stock markets finished mixed. Japan's Nikkei 225 index slipped 66.44 points, or 0.58%, to 11,475.27, amid weakness in technology and banking shares. In Hong Kong, the Hang Seng index added 31.97 points, or 0.26%, to finish at 12.284.08.
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