Investors wary
about oil, Xerox

NEW YORK » Wall Street waffled before finishing lower yesterday as oil prices seesawed and traders weighed lackluster earnings from Xerox Corp. against a surge in housing prices.

Investors were nervous about oil after crude futures' rally on Friday. So stocks gave up early gains as oil crept upward; futures finally closed at $59 a barrel, up 35 cents, on the New York Mercantile Exchange.

Stocks had advanced on news that the median price for existing homes in July was a record $219,000, a gain of 14.7 percent from the median, or midpoint, prices a year ago. That was the biggest jump in prices since November 1980 and another in a string of reports showing the nation's economy continues to expand at a healthy pace.

But investors may stay on the sidelines until the Commerce Department releases its eagerly anticipated report on second-quarter gross domestic product numbers Friday, said Ed Peters, chief investment officer at PanAgora Asset Management Inc.

"A directionless market is usually a down market," Peters said. "Right now, people are waiting instead of buying."

The Dow Jones industrial average fell 54.70, or 0.51 percent, to 10,596.48.

Broader stock indicators were slightly lower. The Standard & Poor's 500 index, which has gained for the last four weeks, fell 4.65, or 0.4 percent, to 1,229.03, and the Nasdaq composite index fell 13.00, or 0.6 percent, to 2,166.74. The drop sent the Nasdaq back into negative territory for the year.

Bonds fell, with the yield on the 10-year Treasury note rising to 4.25 percent, up from 4.22 percent Friday. The U.S. dollar was up against the euro. Gold prices were higher.

BellSouth Corp., the dominant local telephone provider in nine southeastern states, reported a more than 20 percent drop in second-quarter profit on a slight rise in revenue. The decline beat analysts' expectations, and the stock rose 9 cents to $26.81.

But Xerox fell 85 cents to $13.20 after the maker of copiers and printers missed Wall Street estimates and gave third-quarter earnings guidance below analysts' current forecasts. Goldman Sachs Group Inc. downgraded the stock.

Profits at American Express Co. soared 16 percent in the second quarter, handily beating analysts estimates. Stock in the credit card and travel company fell 1 cent to $54.56.

Wall Street has been lukewarm about second-quarter earnings, although most companies have beaten expectations.