New York: Wall Street’s growing angst about company earnings gave stocks a mixed finish on Tuesday, with the Dow Jones industrials suffering their fifth straight loss. The broader market indicators closed modestly higher.
The concern on the Street is that the recession will have a more severe impact on profits than investors have been anticipating. They shied away from placing big bets after aluminum giant Alcoa Inc. reported late Monday that it lost $1.19 billion during the fourth quarter. An analyst’s warning about profits at General Electric Co. only added to the market’s uneasiness.
Questions about earnings in particular companies’ expectations for business this year are likely to dominate trading in the coming weeks. Computer chip maker Intel Corp. and drug company Genentech Inc. are among the companies reporting results this week.
The market also will get an earlier-than-expected reading on the financial sector when JPMorgan Chase & Co. reports earnings on Thursday nearly a week ahead of schedule. Investors are fearful of another year of multibillion dollar losses among financial companies, as analysts forecast mounting problems in credit card and commercial real estate portfolios.
The Dow fell 25.41, or 0.30%, to 8,448.56. Both Alcoa and GE weighed on the blue chips.
Broader indexes advanced. The Standard & Poor’s 500 index rose 1.53, or 0.18%, to 871.79, while the Nasdaq composite index rose 7.67, or 0.50%, to 1,546.46.
Losing stocks outnumbered gainers by about 8 to 7 on the New York Stock Exchange, where volume came to 1.31 billion shares.
Bond prices were mixed. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 2.30% from 2.31% late on Monday.
On Tuesday, Federal Reserve chairman Ben Bernanke said the stimulus package being crafted by President-elect Barack Obama and Congress could provide a “significant boost” to the sinking economy. During a speech in London, he also said “more capital injections and guarantees may become necessary” to stabilize financial markets and spur more lending. Obama is pushing for an economic stimulus that includes big tax cuts and has an estimated price tag of about $800 billion.
Also Tuesday, the House Financial Services Committee scheduled a hearing on the financial bailout fund in advance of legislation proposed by committee chairman Barney Frank that would place tough restrictions on recipients of the money and require spending to reduce mortgage foreclosures.
Obama on Monday asked President George W. Bush to request the money so that it can be at the ready when Obama takes office next week. Bush agreed to notify Congress. Obama said he would fundamentally change the way the remaining funds are allocated. He said some relief would be directed toward housing and small business.