Dow sinks 97 amid
mixed earnings data

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By Lisa Singhania
Associated Press

NEW YORK >> Mixed earnings from Citigroup and Eli Lilly set off more selling on Wall Street today as investors, still unimpressed by first-quarter reports, shied away from commitments to stocks.

Trading volume was light, a reflection of investors' unwillingness to participate until corporate forecasts become less murky. Analysts said that until companies start to express confidence that business is improving, a rally is unlikely.

"So far, earnings have not created a catalyst, there's no dramatic guidance to think the future's going to be better and then you have this overhang in the Middle East," said Larry Wachtel, market analyst at Prudential Securities. "No one is emboldened to step up to the plate in an environment like this."

The Dow Jones industrial average closed down 97.15, or 1.0 percent, at 10,093.67. It was the blue-chip gauge's lowest close since Feb. 22, when the index was at 9,968.15.

Broader stock indicators also struggled.

The Standard & Poor's 500 index fell 8.46, or 0.8 percent, to 1,102.55, while the technology-focused Nasdaq composite index lost 2.40, or 0.1 percent, to 1,753.79.

Declining issues led advancers nearly 3 to 2 on the New York Stock Exchange, with 1,765 down, 1,395 up and 198 unchanged. Volume was 1.11 billion shares vs. 1.26 billion Friday.

The NYSE composite index fell 4.15 to 583.85, the American Stock Exchange composite index rose 4.14 to 905.00 and the Russell 2000 index lost 2.72 to 512.74.

The Treasury's 2-year note rose 1/32 to 100 1732; its yield fell 3 basis points to 3.33 percent. The 10-year note gained 532 to 98; its yield lost 2 basis points to 5.14 percent. The 30-year bond advanced 1 2/32 to 96 1732; its yield fell 3 basis points to 5.62 percent.

The selloff was the latest in a series of pullbacks caused by investors' growing pessimism. First-quarter earnings reports this month were supposed to show business was turning around, but so far they have been a disappointment.

Although the numbers themselves have been satisfactory, most companies have been reluctant to say a turnaround has started, and that has raised concerns that profits won't be robust enough to support higher stock prices.

Investors had hoped that this week's reports, which include some of the nation's biggest and most important companies, would provide some momentum. That didn't happen today.

Citigroup fell $1.18 to $45.92 after its first-quarter results fell below Wall Street's expectations due to losses in its Argentine holdings.

Drug maker Eli Lilly gained $1.78 to $75.20 after meeting analysts' expectations for the first quarter despite its third consecutive quarterly earnings decline of more than 20 percent.

General Electric, which reported disappointing results last week, fell $1.70, or 5.1 percent, to $31.85 after a New York Times article questioned the company's earnings prospects.

The company also said it plans to cut 7,000 jobs at GE Capital, the source of about 40 percent of GE's profit, and reduce expenses at the business by about $1 billion this year.

"Investors are wanting a recovery, hoping for a recovery, but day-by-day they're getting these disappointments and setbacks," said Tim Leach, chief investment officer for Wells Fargo's Private Client Services.

The losses were less severe for tech stocks. Intel lost 37 cents to $28.02 a day before its earnings were to be reported. The chipmaker is considered a bellwether for the sector, and many people are waiting to hear what it has to say about business and the future.

Analysts said the sector's slightly better performance today has more to do with lower prices following heavy selling this year rather than any stronger prospects for the future.

The Nasdaq is 10.1 percent below its 2002 start; compared with a 0.7 percent gain in the Dow and a nearly 4.0 percent loss in the S&P during the same time.

Oil-related stocks advanced as the sector benefited from news that Venezuelan president Hugo Chavez had returned to power two days after an attempted coup.

Chavez has restricted his country's oil sales to keep the price of oil high, and oil prices had dipped during the period he was out of office. Exxon Mobil advanced 30 cents to $41.60, while Baker Hughes rose $1.03 to $34.78.

Still, oil remained a concern. The market was watching developments in the Middle East because instability in that region could affect oil prices. Israel indicated today that troops will be out of all West Bank cities except Ramallah and Bethlehem within a week.

Overseas, Japan's Nikkei stock average climbed 1.6 percent.