Star-Bulletin news services
Slow corporate outlook
dogs investor confidenceThe Dow and S&P posted gains
while the Nasdaq fell 5.26
NEW YORK >> Wall Street waffled through an uninspired session yesterday, leaving stocks narrowly mixed despite solid results from Johnson & Johnson and several banking companies as investors waited for Intel Corp.'s earnings report.
After the close of regular trading, Intel announced earnings that were in line with Wall Street expectations, but the company's sales were at the low end of Intel's previous outlook and slightly less than analysts had forecast.
Investors were looking to Intel's results for a better read on the health of the technology sector, which was hit hard over the past week with analyst downgrades and lowered outlooks. Intel's third-quarter and 2004 outlooks, while strong, were somewhat disappointing for investors hoping for a pleasant surprise.
Despite the negativity surrounding earnings -- investment firm Merrill Lynch & Co. missed its earnings estimates yesterday -- some analysts saw reasons for hope.
"I think some of the earnings expectations have been lowered over the past few weeks, and that'll be built into prices," said Doug Sandler, chief equity strategist at Wachovia Securities. "That does give us some room to the upside of this trading range we're stuck in should earnings come in strong."
The Dow Jones industrial average rose 9.37, or 0.1 percent, to 10,247.59.
Broader stock indicators were narrowly mixed. The Standard & Poor's 500 index gained 0.79, or 0.1 percent, to 1,115.14, and the Nasdaq composite index was down 5.26, or 0.3 percent, at 1,931.66.
The Commerce Department's latest report on the nation's trade deficit gave the market a lift. The trade deficit narrowed to $46 billion in May, dropping 4.5 percent from April's all-time high. U.S. exports had their best month on record, the department said, helped in part by a weaker dollar.
However, investor focus remained with earnings and, in particular, companies' outlooks for the second half of the year, which call for slower growth rates. Add that to concerns over terrorism, election year politics and ever-present interest rate concerns, and investors "are going to be sitting on their hands," said Hugh Johnson, chief investment officer at First Albany Corp.
"What we see right now is the market bumping up against a wall of worry," Johnson said. "For every investor, there's something to worry about. And that's why, even though second quarter should come in strong, it won't be enough to really spark anything."
The 27 cents per share profit Intel posted may have met Wall Street estimates, but investors were clearly disappointed in its sales and outlook. Intel fell 99 cents to $25.15 in after-hours trading.
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