Stocks finished at session lows following fresh corporate profit warnings and worries over Intel's (INTC) mid-quarter update later this week.
The Dow Jones industrial average ended down 72.49 points, or 0.71%, to 10,122.52. The broader Standard & Poor's 500 index was off by 8.62 points, or 0.78%, to 1,099.15.
The tech-heavy Nasdaq composite index fell 25.6 points, or 1.37%, to 1,839.49. Intel led the loss column among tech stock ahead of an update on its third quarter Thursday.
Looking ahead to Tuesday, investors will get earnings updates from grocery chain Albertson's (ABS)and jewelry retailer Zale (ZLC).
Investors Tuesday will also get the latest update on Chicago PMI, a gauge of manufacturing health and August consumer conffidence from the Conference Board.
Trading volume was light Monday and should continue to be over the rest of the week, as many traders are on vacation ahead of the Labor Day weekend, and others based in New York keep clear of the Republican National Convention. Investors appear to be cautious during the GOP gathering and may be securing gains following the market's recent strength, notes Standard & Poor's MarketScope.
Market players appeared to disregard another plunge in crude oil futures on Monday, this time to under $42 per barrel amid weakness in gasoline futures. "There is the sense that there are less supply constraint worries in the markets -- regardless of how realistic such expectations may be," notes economic research firm, Informa Global Markets. Meantime, OPEC president Purnomo Yusgiantoro has said that the cartel plans to hike its spare capacity by about one million barrels per day in the coming months. OPEC is estimated to be pumping close to 30 million barrels per day.
In economic news, personal income in July rose 0.1% (vs. a 0.2% rise in June). The data set a positive tone for expectations of third-quarter gross domestic product, notes Informa. Personal spending rose 0.8% in July after a 0.2% contraction in June, showing signs of an improved retail sales climate.
A profit warning from Tyson Foods (TSN) weighed on the market. The company says its fourth quarter will fall short of expectations, on unfavorable results from its grain hedging activity and weaker demand in its chicken and beef segments, due in part, to a recent case of mad cow disease. Tyson expects its fiscal 2004 EPS in a range of $1.08 to $1.15.
In other earnings news, Accredo Health (ACDO) posted fourth quarter earnings of 40 cents per share, vs. 36 cents on a 16% revenue rise. Accredo cut its fiscal 2005 EPS guidance, citing lower reimbursement rates from the Medicare program for some medicines. The shares were sharply lower.
In tech news, Tessera Technologies (TSRA) was higher after raising its third quarter revenue guidance to an upward range of $22.6 million, and expects a quarterly EPS as high as 26 cents. The company says that recent customer reports show that the company will receive greater-than-expected royalty revenue.
In deal news,
real estate investment trust LNR Property (LNR) agreed to be acquired by a group led by Cerberus Capital Management for $63.10 in cash per share.
The major economic highlight in the week ahead is the August employment report, due Friday. Economists expect the unemployment rate to be 5.5%. Meantime, the August consumer confidence numbers arrive on Tuesday, and initial jobless claims arrive Thursday, along with updates on factory orders and inventories for July.
This week's earnings calendar includes quarterly updates from Bayer (BAY), Veritas DGC (VTS), and Del Monte Foods (DLM).
U.S. Treasuries finished higher in price Monday, with the yield on the benchmark 10-year note at 4.19%. A weaker-than-expected personal income report gave the bond market a lift, notes research firm Action Economics. The core PCE deflator was flat -- the year-over-year growth rate is at 2.4% -- which instilled some confidence that inflation remains tepid.
In currencies, the euro was worth $1.204, the pound sterling was at $1.791, while the U.S. dollar was trading at 110.065 yen.
European stock markets finished lower Monday, though volume was light, as oil prices inched higher and on fears of global terrorism. Germany's DAX index was down 12.33 points, or 0.32%, to 3,838.85, on profit-taking. In Paris, the CAC 40 index was off 12.53 points, or 0.34%, to 3,636.71.
Financial markets in London were closed for the summer bank holiday. On Friday, the Financial Times-Stock Exchange 100 index rose 36.2 points, or 0.81%, to 4,490.1.
Asian markets finished mixed on Monday. Japan's Nikkei 225 index lost 25.06 points, or 0.22%, to close at 11,184.53, on profit taking. In Hong Kong, the Hang Seng index gained 59.36 points, or 0.46%, to close at 12,877.78.