Stocks mixed ahead of earnings season
NEW YORK » Stocks finished an uneasy session mixed yesterday as investors grew nervous ahead of the second-quarter earnings season. Weakness in the technology sector dragged on the Nasdaq composite index.
Expectations for solid quarterly results helped the market to an early advance, but the enthusiasm waned throughout the session, prompting some traders to lock in profits. Dow Jones industrial Alcoa Inc. -- the first major U.S. company to report -- sagged after releasing its results post-close.
While analysts forecast another round of double-digit profit growth from companies in the Standard & Poor's 500 index, some said strong results may have already been priced into the market and that lingering confusion about interest rates and economic growth were keeping stocks from gaining.
"The nice thing about earnings is that they're probably going to be higher," said Ed Peters, chief investment officer for PanAgora Asset Management. "Unfortunately, that's old news. Good earnings have already been discounted -- people are looking at what's going to happen next."
Several acquisitions were giving stocks some support. Kraft Foods Inc. agreed to buy the Spanish and Portuguese units of United Biscuits for $1.07 billion, and Kimco Realty Corp. acquired Pan Pacific Retail Properties Inc. for $2.9 billion.
At the close of trading, the Dow added 12.88, or 0.12 percent, to 11,103.55, after gaining as much as 84 points earlier.
Broader stock indicators were mixed. The S&P 500 rose 1.86, or 0.15 percent, to 1,267.34, and the Nasdaq dropped 13.13, or 0.62 percent, to 2,116.93.
Wall Street's persistent concerns about the economy squelched excitement over earnings. Although companies were largely expected to show upbeat results, recent profit warnings from Advanced Micro Devices Inc., 3M Co. and EMC Inc. sparked fears that higher interest rates have contained inflation but are hurting economic growth.
"I think the key thing will be earnings," John Caldwell, chief investment strategist for McDonald Financial Group, said of whether stocks rise or fall in the coming weeks. "The numbers look good, but enough people are on edge after 3M and EMC."
Crude futures fell as energy traders took profits from the recent surge in prices, but worries about Iran and motor fuel demand were expected to support the market. A barrel of light crude lost 48 cents to $73.61 on the New York Mercantile Exchange.