Major indexes cling to narrow range after ricin scare, shrugging off new slew of strong earnings.
February 3, 2004: 11:42 AM EST
NEW YORK (CNN/Money) - U.S. stocks drifted near unchanged late Tuesday morning as investors took a cautious stance following the release of the latest group of mostly upbeat earnings and the discovery of a poisonous substance in a U.S. Senate mail room.
About two hours into the trading session, the Dow Jones industrial average (up 4.60 to 10503.78, Charts), the Standard & Poor's 500 (down 0.12 to 1135.14, Charts) index and the Nasdaq composite (up 2.59 to 2065.74, Charts) all traded just above breakeven.
"The market rose in the beginning of January and then slowed down a bit," said Michael Carty, principal at New Millennium Advisors. "The earnings reports and outlooks have been fairly positive, but I think trade has been kind of muddled recently, with the market wanting to give itself room to breathe after the big run its had. I think the trend remains to the upside."
A suspicious white powder found in the mailroom of Senate Majority Leader Bill Frist was determined to be ricin, a highly toxic substance. Most of the Senate complex was shut down, with only essential personnel allowed access to the Capitol.
The incident initially spooked investors, reviving fears of chemical and biological terrorist attacks, which first surfaced after September 11 when there were several incidents of anthrax being sent through the mail, resulting in deaths. (For more on this, go to CNN.com.)
But the impact of the discovery waned as the morning wore on and investors turned their focus back on the day's earnings news.
After the close of trade, Cisco Systems (CSCO: up $0.14 to $26.34, Research, Estimates) is due to report its quarterly results. The company is forecast to have earned 17 cents per share, 2 cents more than a year earlier, according to First Call estimates. The stock traded modestly higher.
Caterpillar (CAT: down $0.46 to $77.03, Research, Estimates) and other machinery stocks edged lower after Bear Stearns downgraded the sector to "market weight" from "overweight," saying earnings growth could be limited by the increase of basic materials cost, and the impact of a rising interest rate environment.
Shares of automakers Ford (F: down $0.16 to $13.79, Research, Estimates) and General Motors (GM: down $0.74 to $47.96, Research, Estimates) continued the decline that started last week and extended into Monday after two high-profile downgrades of Ford's stock. The companies and other automakers are due to report their latest monthly sales figures Tuesday.
Market breadth was narrowly mixed. On the New York Stock Exchange, where 550 million shares traded, advancing issues led decliners by eight to seven. On the Nasdaq, losers beat gainers by a small margin on volume of 720 million shares.
Treasury prices rose. The yield on the 10-year note fell to 4.12 percent from 4.14 percent late Monday. Bond prices and yields move in opposite directions.
NYMEX light sweet crude oil futures fell 38 cents to $34.60 a barrel. COMEX gold gained $3 to $402.30.
European markets fell in late trade there. Asian stocks ended lower Tuesday.
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