Stocks ended down but off their session lows on Tuesday after a sobering outlook from tech bellwhether Texas Instruments (TXN) and other downbeat corporate news gave investors an excuse to cash in on recent gains. The retreat marked the first down session in the last four.
The Dow Jones Industrial average ended off 88.08 points, or 1.03%, to 8,450.16. The tech-heavy Nasdaq composite index was off 16.92 points, or 1.29%, to 1,292.75. And the broader Standard & Poor's 500-stock index slipped 9.56 points, or 1.06%, to 890.16.
Earnings reports will take center stage again on Wednesday. The most widely anticipated report will come from media and Internet service company AOL Time Warner (AOL). Also scheduled to release results are hospitality company Hilton Hotels (HLT) and telecommunications equipment company Lucent( LU).
There are no potentially market-moving economic reports due out on Wednesday.
On Tuesday, TI, the semiconductor giant, posted pro forma third quarter earnings that came in slightly below Wall Street estimates, and said profit would dip to near breakenven in the fourth quarter on a sequential revenue decline.
Along with semiconductors, other weak sectors in the session included oil and banks.
Fast-food company McDonald's (MCD) said its quarterly earnings fell for the seventh time in eight periods, weighed by sluggish sales in the United States and Europe, according to wire reports.
Drugmaker Wyeth (WYE) posted a quarterly loss as it was forced to put aside cash to pay for lawsuits ivolving its fen-phen diet pills and weak demand for some other products.
Consumer products maker Kimberly-Clark (KMB) warned that earnings per share for the year will rise about 5%, which is less than previous guidance of about 10% as the company spends more money to advertize Huggies diapers in the U.S. and Europe.
Delivery company United Parcel Service (UPS) posted third quarter profits that fell short of expectations as customers are shipping less in a weak economy.
For-profit post-secondary educator Career Education (CECO) was struggling after at least two investment banks lowered their rating on the company.
Giving some solace to the market was local phone carrier BellSouth (BLS), which said it would meet its 2002 earnings and sales targets.
U.S. Treasuries ended Tuesday's session flat to lower in price. Economic research outfit MMS International notes that with a dearth of significant data releases Wednesday, the market will focus on a speaking appearance by Federal Reserve Chairman Alan Greenspan, and the release of the Beige Book, a summary of economic activity in all of the Fed's regional districts.
European markets were lower. In London, the Financial Times-Stock Exchange 100 index slipped 14.90 points, or 0.36%, to 4,118.90. The biggest contributors to the negative performance in the FTSE included oil stocks BP-Amoco and Shell Transport as crude oil prices continued to move lower. In France, the CAC 40 was down 35.92 points, or 1.14%, to 3,121.01. And in Germany, the DAX Index was lower by 126.70 points, or 3.86%, to 3,155.97.
In Asia, the markets posted losses. The Nikkei fell 289.62 points, or 3.22%, to 8,689.39, led by semiconductor-related shares on earnings fears after Texas Instruments' profit warning. In Hong Kong, the market lost 21.42 points, or 0.22%, to 9,548.94.