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Wall Street dips on Portugal fears; Alcoa falls late

Wall Street dips on Portugal fears; Alcoa falls late
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First Published: Tue, Jan 11 2011. 08 09 AM IST
Updated: Tue, Jan 11 2011. 08 09 AM IST
New York: US stocks recovered most of their early losses in light volume and ended slightly lower on Monday as prospects for strong earnings helped counter fears Portugal would be forced into a bailout.
Investors say the market’s upward trend remains intact, but the S&P’s third straight session of declines suggests momentum has stalled.
Traders also cited the positive outlook for earnings as a catalyst for the rebound. Even though The S&P 500 edged down, the number of advancers outweighed decliners on both the New York Stock Exchange and the Nasdaq.
Alcoa Inc, the largest US aluminum producer, unofficially began the earnings season after the closing bell by posting a fourth-quarter profit that topped Wall Street forecasts. Still, its shares fell 2% to $16.16 in after-hours trading.
Alan Lancz, president of Alan B. Lancz & Associates Inc in Toledo, Ohio, said Alcoa’s performance should help the market. “It’s a good first shot across the bow for the earnings season,” he said.
Stocks initially fell Monday on worries Lisbon would have to seek a bailout, but concerns faded on talk of support from the European Central Bank.
The euro, seen of late as a proxy for investors’ risk appetite, gained 0.5% against the US dollar, recovering from a four-month low.
“We believe that it’s prudent to monitor debt problems in Ireland, Spain and Portugal, but these situations are nowhere near crisis levels, and we believe they are largely overblown,” said Doug Cote, who helps manage about $50 billion as senior market strategist with ING Investment Management in New York, noting the rebound in the euro.
The Dow Jones industrial average fell 37.31 points, or 0.32%, to 11,637.45. The Standard & Poor’s 500 Index dipped 1.75 points, or 0.14%, to 1,269.75. The Nasdaq Composite Index gained 4.63 points, or 0.17%, to 2,707.80.
The benchmark S&P 500 found technical support near its 14-day moving average, now around 1,264.
Merger deals announced on Monday included Duke Energy Corp agreeing to buy Progress Energy Inc for $13.7 billion in stock. DuPont plans to buy Danisco, a Danish food ingredient firm, for $5.8 billion.
Shares of Progress fell 1.6% to $43.99, and Duke fell 1.2% to $17.58. DuPont, a Dow component, fell 1.5% to $49.03 while Danisco rose 24%.
Apple Inc, up 1.9% to $342.46, led the Nasdaq higher on bets of stronger sales as an announcement of the end of AT&T Inc’s more than three-year of exclusive US rights to sell Apple’s iPhone was expected. AT&T fell 1.8% to $28.34.
After the close, AMD shares dropped 4.2% to $8.80 on news the chipmaker’s chief executive had resigned.
Intel Corp said it is paying graphics chip designer Nvidia Corp a $1.5 billion licensing fee, settling a legal dispute and boosting Nvidia’s shares 4.7% to $21.60.
Education stocks slid after Strayer Education Inc said new enrollments at its university fell 20% in the winter term.
Strayer shares plunged 22.6% to $118.60. Corinthian Colleges Inc tumbled 13.3% to $4.58.
Apollo Group Inc, lost 5.4% to $35.94 but recovered its losses after the bell, following its quarterly results. In extended trading, Apollo jumped 9.6% to $39.37.
About 7.4 billion shares traded on the New York Stock Exchange, the American Stock Exchange and Nasdaq, below last year’s estimated daily average of 8.47 billion.
Advancing stocks outnumbered declining ones on the NYSE by 1,543 to 1,458, while on the Nasdaq, about five stocks rose for every four that fell.
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First Published: Tue, Jan 11 2011. 08 09 AM IST