Market closes just below unchanged after flip-flopping throughout session. Inflation worries remain.
April 14, 2004: 4:16 PM EDT
NEW YORK (CNN/Money) - U.S. stocks ended a tumultuous session just below unchanged Wednesday, as investors sorted through new inflationary worries amid upbeat economic news and optimism about first-quarter earnings.
According to preliminary reports, the Dow Jones industrial average (down 3.33 to 10377.95, Charts) closed little changed, the Standard & Poor's 500 (down 1.27 to 1128.17, Charts) index fell 0.1 percent, while the Nasdaq composite (down 5.23 to 2024.85, Charts) lost 0.2 percent. The indexes had been on both sides of unchanged throughout the session, and had been down about 0.4 percent until about half an hour before the close. Market breadth was very negative.
U.S. stock markets tumbled sharply Tuesday, as investors digested the session's strong earnings and surprise rise in retail sales and determined that interest rates could rise as soon as this summer or early fall, instead of later, as had previously been expected.
Those concerns were revived Wednesday following the release of the CPI, a broad measure of consumer prices, although the market managed to recover most of the session's losses by the close. Consumer prices rose 0.5 percent in March, when economists were expecting a rise of 0.3 percent, in line with February. Prices, excluding volatile food and energy prices, rose 0.4 percent in March, versus expectations for a gain of 0.2 percent, the same rise clocked in February.
A number of interest rate-sensitive sectors were under pressure again, including real estate investment trusts (REITs), homebuilders, financials and commodity-related issues.
The focus on interest rates somewhat distracted investors from the earnings, although Intel's weaker-than-expected report and forecast drew some attention, as did McDonald's lower March same-store sales.
Earnings due after the close Wednesday include Advanced Micro Devices (AMD: down $0.04 to $17.12, Research, Estimates), Apple Computer (AAPL: down $0.29 to $26.64, Research, Estimates) and Texas Instruments (TXN: down $0.30 to $28.68, Research, Estimates). Thursday brings one of the week's most-anticipated reports, from IBM (IBM: up $0.66 to $93.70, Research, Estimates).
Here's what was moving near the close.
What moved?
McDonald's (MCD: down $1.27 to $27.00, Research, Estimates) lost more than 6 percent and was the Dow's biggest decliner following news issued late Tuesday. The company reported March sales at stores open a year or more in the U.S. that rose from a year earlier, but missed estimates. The company also said same-store sales in Europe fell in March when analysts were expecting a rise. On a positive note, the company said it expects earnings of 40 cents per share, up from 29 cents a year earlier and 3 cents more than what analysts currently expect.
However, investors and analysts focused on the same-store sales numbers, sending the stock lower. CIBC World Markets downgraded the fast-food behemoth to "sector performer" from "sector outperformer" early Wednesday.
Technology leader Intel (INTC: down $0.30 to $27.37, Research, Estimates) reported earnings late Tuesday of 26 cents per share, up from 14 cents a year earlier and a penny less than what analysts surveyed by First Call were expecting. Revenue also rose from the year earlier but missed expectations.
The company's chief financial officer also said that technology spending is picking up, a major positive for the technology sector. However, the company also said that revenue in the current quarter could miss estimates and that its profit margins would be negatively impacted by lower revenue and increased spending on new technology.
Shares fell 1 percent and topped the Nasdaq's most-actives list.
Security stocks also tumbled in active Nasdaq trade, succumbing to profit-taking after amassing huge gains in the last few weeks in response to heightened geopolitical worries. Among the movers, Mace Security International (MACE: down $3.13 to $7.02, Research, Estimates) lost 25 percent and IPIX (IPIX: down $6.24 to $15.18, Research, Estimates) lost more than 20 percent.
Take-Two Interactive Software (TTWO: down $3.28 to $31.92, Research, Estimates) fell 10 percent after the video game publisher warned that sales and earnings in the current quarter will miss expectations because of delays in new game releases. The company also said that its CEO had resigned.
On a positive note, chemical maker and fellow Dow component DuPont (DD: up $1.31 to $45.00, Research, Estimates) said quarterly earnings would top estimates thanks to solid performance in its agriculture and nutrition segment. Forest products maker Georgia-Pacific (GP: up $0.13 to $34.25, Research, Estimates) also said its results would top expectations because of strength in its building products businesses.
However, expectations for strong results remain and that may be providing some support for the market, analysts say. First-quarter earnings are expected to rise 21 percent in the first quarter versus the same period a year earlier, according to a consensus of analysts surveyed by tracking firm First Call.
Market breadth remained negative but was improved from the early going. On the New York Stock Exchange, decliners topped advancers by twelve to five as 910 million shares changed hands. On the Nasdaq, losers beat gainers nine to seven as 1.15 billion shares traded.
Treasury prices tumbled, pushing the 10-year note yield up to 4.38 percent from 4.35 percent late Tuesday. The dollar rose versus the yen and euro.
Among commodities markets, NYMEX crude oil futures fell 43 cents to $36.25 a barrel. COMEX gold fell $7.20 to settle at $400.50 an ounce.
In international trading, European and Asian markets closed lower.
O Clubeinvest.com informa que nenhuma da informação
aqui facultada deverá ser entendida como conselho ou recomendação
de qualquer tipo de transacção ou investimento.
