Stocks finished lower Wednesday, as the major indexes consolidated Tuesday's gains amid weaker than expected housing data. Investors also watched trading in the U.S. dollar, which rebounded after hitting a fresh low against the euro.
The Dow Jones industrial average dropped 42.9 points, or 0.4%, to 10,671.99. The broader Standard & Poor's 500-stock index edged down 5.17 points, or 0.45%, to 1,151.82. The tech-heavy Nasdaq composite index fell 3.88 points, or 0.19%, to 2,076.47.
After the market close, Applied Materials (AMAT) reported fiscal first-quarter earnings per share of 12 cents (excluding charges), above the forecast of 8 cents and a loss of 4 cents a year ago. Net sales rose 48% from a year ago to $1.56 billion. New orders rose 32% from the previous quarter to $1.68 billion. The shares rose in after-hours trading.
Thursday brings even more earnings news, from tech and telecom heavyweights Nextel Communications (NXTL), Hewlett-Packard (HPQ), Ciena (CIEN), and Qwest (Q).
Two large retailers, Wal-Mart (WMT) and Target (TGT), are also scheduled to report earnings on Thursday.
On the economic calendar, the U.S. Bureau of Labor Statistics said that the January producer price index report will not be released this week. Economic reports that are due Thursday include weekly jobless claims, leading indicators, and the Philadelphia Fed index.
In economic news Wednesday, housing starts fell 7.9% to a 1.9 million annual rate in January, weaker than expected. January building permits fell 2.8%, also lower than forecast.
In the currency market, the U.S. dollar rebounded after the euro hit a new record against the dollar of $1.293.
Among stocks on the move Wednesday, Rambus (RMBS) was sharply higher after the company says the antitrust suit brought against company by the Federal Trade Commission was dismissed in its entirety.
IBM (IBM) shares fell, and put pressure on the Dow average, on news that a federal judge ruled in a landmark pension lawsuit that IBM must make back payments to workers covered by a 1999 retirement plan that didn't give longer-service workers a fair share of benefits.
Elan (ELN) and Biogen Idec (BIIB) were also climbing as the companies say they expect to submit an application for approval of Antegren as a treatment for multiple sclerosis to the FDA by mid-2004, a year earlier than planned.
Broadcom (BRCM) says it will hold a conference call after the market close today "to discuss its stronger business outlook." S&P thinks the company will raise its March-quarter revenue guidance.
After the market close Tuesday, Agilent Technologies (A) reported first-quarter EPS of 21 cents, vs. a loss of 23 cents a year ago, on a 16% revenue rise. The company says without the normal first-quarter drop, it's somewhat cautious about assuming a usual seasonal rise in second-quarter activity. The shares fell.
Network Appliance (NTAP) reported third-quarter EPS of 11 cents, vs. 6 cents a year ago (pro forma), on a 30% revenue rise. The shares rose and helped lift the computer storage group.
Shares of Chinese Internet outfit NetEase.com (NTES) jumped after the company reported a fourth-quarter net profit of $11.4 million, vs. $5.2 million a year ago, on a 77% revenue rise.
Dobson Communications (DCEL) shares plunged about 35% after the company reported a fourth-quarter loss of 53 cents (GAAP), despite a 92% total revenue rise. Investors expect the company to reduce 2004 guidance in a conference call. Bear Stearns downgraded the stock.
In deal news, Disney (DIS) says it will acquire the Muppets and Bear in the Big Blue House properties from the Jim Henson Company. Terms of the deal were not disclosed.
After a strong start, Treasuries reversed and fell by the close of trading. Prices opened higher following another round of Bank of Japan foreign-exchange intervention, which was prompted by a 7% rise in Japanese fourth-quarter GDP and a subsequent yen rally, says Informa Global Markets. Weaker U.S. housing data also helped.
By noon, though, the rally stalled as the U.S. dollar popped without intervention help, and quelled speculation for more foreign-related Treasury buying. Prices moved into negative territory later on as the failure of 10-year note yield fall below 4% again triggered tech selling, says Informa.
European stock markets finished mixed Wednesday.
London's Financial Times-Stock Exchange 100 index was down 18.6 points, or 0.42%, to 4,442.9 as traders look to the U.S. market for direction. Elan Corp. was higher after the company said its fourth-quarter loss narrowed. CRC Group was lower after the company reported 2003 net income fell due to a decline in sales to Nokia, its biggest customer. Kingfisher was higher after the company said full year earnings are likely to be at the high end of estimates.
In Paris, the CAC 40 rose 5.2 points, or 0.14%, to 3,709.02. Air France was higher after the airline said third-quarter EPS rose 33%. Thales was lower; it said sales fell due to currency differentials.
Germany's DAX index fell 0.52 point, or 0.01%, to 4,095.34. VDMA says 2004 plant and machinery production are expected to rise 2% in 2004. It says the stronger euro is hampering Germany's recovery. The euro was up at $1.2891, but down from high above $1.29.
Asian markets finished mixed Wednesday. In Japan, the Nikkei 225 index fell 24.32 points, or 0.23%, to 10,676.81. In Hong Kong, the Hang Seng index rose 112.94 points, or 0.82%, to 13,928.38.