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Big earnings dont help markets Original Source Link: (May no longer be active)
http://cbs.marketwatch.com/news/story.asp?guid=%7B68EEA063-7AC5-469C-BB21-771D1A8CE5AE%7D&siteid=google&dist=google&dist=http://cbs.marketwatch.com/news/story.asp?guid=%7B68EEA063-7AC5-469C-BB21-771D1A8CE5AE%7D&siteid=google&dist=google&dist=
Stocks sink deeper into the red
GE, UTX results can't mask lackluster week for earnings
By Mark Cotton, MarketWatch
Last Update: 5:36 PM ET Jan. 21, 2005
NEW YORK (MarketWatch) -- U.S. stocks ended lower Friday, opening the year with a third straight week of losses for the first time since 1982, as strong results from General Electric and United Technologies could not dispel concern over a very mixed earnings picture.
A report showing a surprise dip in consumer sentiment for January further unsettled investors in the day's trading.
The Dow Jones Industrial Average ($INDU: news, chart, profile) ended down 78.48 points at 10,392.99. The benchmark index fell 1.6 percent on the week.
Over the last three weeks, the Dow has fallen 3.6 percent. The last time the index ushered in the year with three weeks of losses in 1982, the Dow fell 3.4 percent but ended up 20 percent on the year.
The Nasdaq Composite Index ($COMPQ: news, chart, profile) fell 11.61 points, to 2,034.27, capping a loss of 2.6 percent for the week. The tech-rich index is now down 6.5 percent since the start of the year.
The S&P 500 Index ($SPX: news, chart, profile) fell 7.54 points, to 1,167.87. The broad gauge ended 1.4 percent on the week, and has shed around 2.3 percent since the beginning of the year.
Turning back to Friday's Dow movers, losses for 3M (MMM: news, chart, profile) Boeing (BA: news, chart, profile) , and Procter & Gamble (PG: news, chart, profile) weighed heavily on the index.
General Electric (GE: news, chart, profile) saw early gains fade as its better than expected earnings failed to act as a bulwark against the broader market downturn. GE ended down 0.7 percent at $35.13, off an intraday high of $35.83.
United Technologies (UTX: news, chart, profile) fared better, paring gains but closing out the session, up 0.3 percent, at $100.08.
Verizon Communications (VZ: news, chart, profile) climbed 0.6 percent and Citigroup (C: news, chart, profile) rose 0.3 percent, buoyed by broker upgrades.
"There was some unsettling news with regards to consumer sentiment and there is still the reverberation of some of the more disappointing earnings news this week, which more than anything else has proved troubling for the market," said David Sowerby, portfolio manager at Loomis Sayles.
In morning trading, stocks came off early highs after researchers at the University of Michigan said consumer sentiment eroded in January.
The university's consumer sentiment index fell to 95.8 in January from 97.1 in December. The increase was below the consensus forecast of Wall Street economists who had expected sentiment to rise to 97.4. See full story.
Dollar, gold, bonds, oil
In the currency markets, the dollar extended its losses against the euro and turned lower against the Japanese yen as the weak sentiment data left some traders betting that the Fed might pause its policy of raising interest rates at a measured pace. See Currencies.
Gold futures ended higher, marking their highest closing level since early January, as expectations of lasting weakness in the U.S. dollar and broad market uncertainty fueled investment and physical demand for the precious metal.
The benchmark February gold contract was up $4.30 at $426.90 an ounce. See full story.
Treasurys ended higher as the stock market pulled back with investors seeking the safety of fixed-income investments ahead of the weekend.
The 10-year benchmark note ended up 6/32 100 28/32, with its yield at 4.14 percent.
Crude futures ended higher after the Organization of Petroleum Exporting Countries lifted its 2005 demand forecast.
This week's cold snap in the United States coupled with expectations of an OPEC output cut and continuing violence in Iraq lent further support.
Oil for March delivery was up $1.22, at $48.53 a barrel. On the week, the contract ended unchanged. See full story.
Turning back to the broader market for equities, decliners had a 16 to 15 edge over advancers on the New York Stock Exchange, while losers outpaced winners by a wider 17 to 13 score on the Nasdaq.
Volume was 1.6 billion on the Big Board, and just more than 2 billion on the Nasdaq.
On a sector-by-sector basis, energy ($OIX: news, chart, profile) and oil service stocks ($OSX: news, chart, profile) were the only two areas of the market posting solid gains, helped by a rise in crude oil prices.
Dow stocks in focus
GE posted forecast-beating fourth-quarter earnings, driven by 19 percent growth in industrial sales and a 16 percent increase in financial services sales.
The conglomerate also issued a "confident" outlook on 2005, saying it expects to achieve its 2005 growth goal. Yet GE's stock turned lower in late afternoon trading, dipping 0.7 percent in line with the broad market pullback. See full story.
Fellow conglomerate and Dow component United Technologies also reported quarterly earnings ahead of analyst estimates, while confirming expectations of earnings per share growth of 10 percent to 15 percent for 2005.
The company, which counts Otis elevators, Pratt & Whitney aircraft engines and Sikorsky helicopters among its businesses, saw its shares edge higher in morning trading. See full story.
In other news for Dow stocks, Hewlett-Packard (HPQ: news, chart, profile) said it will pay $141 million to settle a four-year-old patent dispute with Intergraph (INGR: news, chart, profile) . H-P said it expects the agreement to lower fiscal first-quarter earnings by around 3 cents. See related story.
Hewlett-Packard's shares advanced 0.2 percent, at 19.99.
On the merger and acquisition front, Pfizer (PFE: news, chart, profile) has agreed to buy closely held Angiosyn, a specialist in eye disease treatments, in a deal valued at as much as $527 million. The drug giant's shares fell 2 percent, to $24.48. See full story.
Goodyear Tire & Rubber (GT: news, chart, profile) was in focus after a Wall Street Journal report said the largest U.S. tiremaker is considering cost-saving options for its North American operations that could include shuttering plants and cutting jobs. Goodyear has 12 North American plants.
A spokesman told the newspaper that no decisions have been made on restructuring actions. Goodyear shares ended down 1.8 percent.
Broker calls
Shares of Verizon Communications (VZ: news, chart, profile) rebounded from a miserable start to the year after Deutsche Bank upgraded the company to "buy" from "hold," saying the recent decline in the stock represented a buying opportunity for investors.
The telecommunications services giant's shares, a component of the Dow industrials, have lost around 10 percent since the end of 2004 due in large part to a number of negative analyst notes on the company's outlook.
Meanwhile, shares of Citigroup gained after Merrill Lynch upgraded the financial services group to "buy" from "neutral" on valuation grounds and its attractive dividend yield. Read Ratings Game on Citigroup, Verizon upgrades.
Finally, Bear Stearns raised its 2005 earnings forecast for Apple Computer (AAPL: news, chart, profile) to $2.25 a share from $2.10, saying it does not expect any drop-off in demand for its iPod digital music players in the first quarter. Apple shares eked out a gain into the close, ending the session up 3 cents at $70.49.
Mark Cotton is a reporter for MarketWatch in New York.
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