Stocks Finish Mixed

Weakness in cyclicals dragged down blue chips, while energy, retail, and select technology stocks moved higher

Stocks finished mixed on Tuesday, as blue chips were weighed down by weakness in cyclical groups including automobiles and steel. However, energy, retail, and select technology stocks moved higher.

The Dow Jones industrial average fell 5.83 points, or 0.06%, to 10,513.89. The broader Standard & Poor's 500 index rose 2.77 points, or 0.23%, to 1,222.21. The tech-heavy Nasdaq composite was up 7.72 points, or 0.36%, to 2,143.15.

August crude oil futures settled up $1.70 at $60.62 a barrel in New York trading. The latest rally was attributed to tropical storm Emily, which is making its way toward the Caribbean, says economic research outfit Action Economics. The fear is the storm intensifies to hurricane strength and heads into the Gulf of Mexico, where oil and gas rigs could be affected, says Action.

Sources estimate hurricane Dennis resulted in the shut-in of over 4 million barrels of oil production last week, and as a result suspect weekly crude inventories could dip by as much as 3.5 million barrels in the latest reporting week, says Action Economics. The EIA will release weekly inventory on Wednesday at 10:30 a.m. EDT.

Also coming Wednesday is the May trade report. Action Economics looks for fractional widening in the deficit to $57.5 billion from $57.0 billion in April, though talk today centered on a move back toward records at $61 billion. Trade prices will also be reported.

Companies on Wednesday's earnings calendar include Apple Computer (AAPL ), Advanced Micro Devices (AMD ), Gannett (GCI ), and Harley-Davidson (HDI ).

Among sectors on the move Tuesday, retailers, particulary home improvement chains, were up after Home Depot (HD ) was upgraded by Jefferies amid reports that July sales are already looking strong.

PepsiCo (PEP ) rose Tuesday after the soft-drink giant posted a 13% increase in second-quarter earnings to $1.19 billion, or 70 cents a share, thanks in part to strong sales in its international business.

In deal news, Portland, Maine-based financial services group TD Banknorth (BNK ) announced that it agreed to acquire New Jersey's Hudson United Bancorp (HU ) for $1.9 billion in cash and stock in a deal that extend the group's operations throughout the Northeast.

European antitrust authorities raided the European offices of U.S. chipmaker Intel (INTC ) as part of an investigation into potential antitrust violations, according to media reports Tuesday.

Treasury Market

U.S. Treasuries moved lower in price on Tuesday, with the benchmark 10-year note yield rising to 4.14%, partly on back of positioning ahead of the June consumer prices report on Thursday.

World Markets

European stock markets finished lower on Tuesday. London's FTSE 100 index fell 25.2 points, or 0.48%, to 5,217.2. A report that Britain's inflation reached a 7-year high of 2% in June reduces the Bank of England's scope to cut rates even though economy slowing, says S&P MarketScope.

In Germany, the DAX index lost 10.35 points, or 0.22%, to 4,653.03. European finance ministers said eurozone region economic growth will fall short of official forecasts in 2005 as oil hovers near a record, consumer confidence stagnates, and Italy struggles with recession. At the same time, however, HWWI economic institute said German economic growth will almost double next year, helped by a pickup in consumer spending after an early election planned for September.

In Paris, the CAC 40 index was down 7.78 points, or 0.18%, to 4,313.78. Alcatel was higher as preliminary figures show second quarter revenues rose 8%. L'Oreal rose after reporting a 4.1% hike in first-half sales. Alstom was lower despite reporting higher first-quarter sales.

Asian markets closed mixed on Tuesday. In Japan, the Nikkei index gained 17.35 points, or 0.15%, to 11,692.14. The market opened on a firm note but then pared gains. Buying interest recently has come in part from the perception that Japanese stocks, particularly in the information-technology sector, are undervalued relative to foreign peers, says S&P MarketScope. Some of today's weakness reflects profit taking after recent gains. A decline in Japan's June consumer confidence index also weighed on sentiment.

In Hong Kong, the Hang Seng index fell 10.29 points, or 0.07%, to 14,146.95. A late recovery from session lows pushed the Hang Seng back into positive territory after a day of choppy trading, says S&P MarketScope. Large-cap telecom names China Mobile and China Unicom led decliners by index points amid profit taking.

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