Stocks Finish Mixed

Better-than-expected earnings from Alcoa and Genentech boost blue chips, while the Nasdaq retreats

Stocks finished in mixed mode on Tuesday. The Dow average got a lift from better-than-expected earnings from component Alcoa (AA , while weakness in technology and telecommunications stocks dragged down the Nasdaq.

The Dow Jones industrial average rose 14.41 points, or 0.14%, to 10,253.17. The broader Standard & Poor's 500 index was down 2.46 points, or 0.21%, to 1,184.87. The tech-heavy Nasdaq composite index fell 17.83 points, or 0.86%, to 2,061.09.

In the energy markets, November West Texas Intermediate crude oil was up $1.73 at $63.53 a barrel. A report from the IEA, saying it thought demand would increase next year, was largely behind price gains on Tuesday, reports Action Economics.

On the economic front, the FOMC minutes from the Sept. 20 meeting, Federal Reserve members mentioned increased inflation risks, but this message has already been largely telegraphed, says Standard & Poor's MarketScope. The minutes noted a rate pause last month would have "mislead" the markets, though it also said there were "considerable near-term uncertainties" regarding the economic outlook after Katrina, reports Action Economics.

Third-quarter href="">earnings season kicked off this week. Alcoa (AA ) posted third-quarter earnings per share from continuing operations of 33 cents, the same as a year earlier, as lower aluminum prices, higher input costs, and seasonal weakness in Europe and the automotive markets offset a 13% sales rise.

Among other Dow components, General Motors (GM ) rebounded from losses yesterday, amid news that Kirk Kerkorian has reportedly been granted permission by U.S. antitrust authorities to raise his stake in the auto maker.

IBM (IBM ) was up on its second brokerage upgrade in two days.

Genentech (DNA ) reported third-quarter EPS of 35 cents, vs. 24 cents a year ago (non-GAAP), on 46% higher operating revenue and 44% higher product sales. The biotech outfit expects about 50% 2005 EPS growth. The stock jumped on the news.

Apple Computer (AAPL ) and Advanced Micro Devices (AMD ) are among the companies reporting results on Tuesday.

In an open letter to Time Warner (TWX ) shareholders, Carl Icahn, backed by a group of investment companies, reiterated his past recommendations that Time Warner initiate a $20 stock buyback and spin off its Time Warner Cable unit, reports The New York Times.

International Rectifier (IRF ) shares tanked after the maker of power semiconductors warned that it sees 40-42 cents first-quarter adjusted EPS on about $273 million in revenue. It says a big amount of orders late in the quarter and product mix was different than forecast. S&P downgraded the stock to sell from strong buy.

Treasury Market

Treasury prices fell, pushing the 10-year notes yield up to 4.38%. The market recovered a bit after the release of the FOMC minutes, given that the hawkish comments were largely priced in to the market.

World Markets

European stock markets finished higher on Tuesday. London's Financial Times-Stock Exchange 100 index was up 6.2 points, or 0.12%, at 5,380.7.

Germany's DAX index gained 9.67 points, or 0.19%, to 5,032.46. In Paris, the CAC 40 index rose 13.46 points, or 0.3%, to 4,549.68.

Asian markets finished with strong gains on Tuesday. In Japan, the Nikkei 225 index surged 328.97 points, or 2.49%, to 13,556.71. The market was boosted by better-than-expected machinery orders data in August. The data supported positive sentiment toward economic growth that has driven the market higher, aside from the mild pullback over the last few days, says Standard & Poor's MarketScope.

Hong Kong's market was closed for the Chung Yeung Festival.

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