Stocks finished lower Thursday, after two consecutive winning sessions. Investors took profits on recent gains, while some disappointing corporate earnings news and mixed economic data also dampened sentiment.
The Dow Jones industrial average fell 75.62 points, or 0.89%, to 8,440.04. The broader Standard & Poor's 500-stock index declined 7.59 points, or 0.83%, to 911.43. Meanwhile, the tech-laden Nasdaq composite index was down 8.93 points, or 0.61%, to 1,457.23.
A busy week of earnings announcements -- in which more than a third of the companies in the S&P 500 index reported -- continued Thursday. Before the bell on Thursday, electronics giant Sony (SNE) missed earnings targets and lowered guidance for the year. Also, Dow Chemical (DOW) reported a profit slide.
In other earnings news, SBC Communications (SBC) reported a quarterly profit, but said revenues fell vs. last year's first quarter.
Internet advertising services outfit Overture (OVER) posted a drop in quarterly earnings and warned of underperformance the rest of the year.
Dow component International Paper (IP) posted a first quarter profit.
Low-cost carrier JetBlue (JBLU) reported a solid rise in first quarter profits and said it placed orders for 65 new airplanes.
The earnings schedule slows somewhat on Friday. Still, large companies expected to make announcements include: Avon Products (AVN), Anadarko Petroleum (), R.J. Reynolds Tobacco (RJR), and Weyerhaeuser (W).
On the economic front, durable goods orders rose 2.0% in March, following a revised 1.5% decline in February. The jump was higher than economists expected. Excluding defense orders, which were boosted by the war in Iraq, durable goods orders rose 1.3%.
On a more downbeat economic note, initial jobless claims for the week ended April 19 rose 8,000 to 455,000 -- a greater increase than anticipated. Jobless claims hit their highest level in over a year.
According to S&P's MarketScope, the negative jobless data cast doubt on a quick economic recovery and led some investors to book profits ahead of Friday's economic data. Investors will keenly await first quarter gross domestic product figures. Economic research firm MMS International expects a 3.0% GDP gain.
Other economic data on the docket are March home sales and the April University of Michigan consumer sentiment index. MMS expects new home sales to jump 5.4% to a 900,000 clip, following a weather-affected slowdown in February. For the Michigan consumer sentiment index, MMS predicts a revised 84.0 from a preliminary 83.2 reading. In March, the index was at 77.6.
On the geopolitical front, investors received news that the SARS virus may be worse than expected. Insurance firm American International Group (AIG) said the impact of SARS in its Asian markets may dent future revenues and profits. Meanwhile, tension between North Korea and the U.S. escalated amid talks over North Korea's nuclear program.
Thursday morning, President Bush, appearing at Ohio-based manufacturer Timken (TKR), stumped for his proposed $726 billion tax cut. Though moderate Republicans had indicated they would seek to trim the cut to $350 billion, Bush maintained the need for a level of at least $550 billion.
Prices of U.S. Treasuries finished firmly higher Thursday. Geopolitical tension also supported prices of the relatively safe Treasury notes. Amid discussions of North Korea's nuclear program, Pyongyang released a statement saying "war may break out at any moment" unless the U.S. changed its policy.
Weakness in stocks, some negative corporate earnings news, and dour jobless claims data bolstered Treasury prices.
MMS anticipates that positive home sales, GDP, and consumer sentiment data on Friday will pressure prices of Treasuries.
European stock markets were lower Thursday. London's FTSE index was down 67.5 points, or 1.7%, to 3,899. In Paris, the CAC 40 index lost 59.63 points, or 2.01%, to 2,903.04. In Frankfurt, the DAX index decreased 82.78 points, or 2.78%, to 2,891.62.
In Asia, Japan's Nikkei 225 index finished Thursday's session higher by 61.19 points, or 0.79%, at 7,854.57. Meanwhile, Hong Kong's benchmark Hang Seng index lost 77.49 points, or 0.91%, to 8,442.11.