Markets & Finance

Stocks Finish Mixed


Stocks finished mixed in moderate trading Tuesday. Solid gains from Texas Instruments (TXN) and Lockheed Martin (LMT), both of which had strong earnings reports, were offset by a soft consumer confidence report and a weak performance from Dow component DuPont (DD), which posted a lower-than-expected profit.

The Dow Jones industrial average finished down 16.71 points, or 0.16%, to 10,579.77. The broader Standard & Poor's 500 index was up 2.13 points, or 0.17%, to 1,231.16. The tech-heavy Nasdaq composite rose 9.25 points, or 0.43%, to 2,175.99.

The Conference Board's survey of U.S. consumer confidence for July slumped to 103.2. The median estimate was for a slight rise to 106.1.

The most closely-watched economic news of the week will be Friday's advance GDP figure. The GDP is expected to rise 3.2%, with a 2.5% in the chain price index, marking a slowdown from the past two quarters, which have seen 3.8% gains in each. Also ahead: new home sales on Wednesday.

Tuesday brought a fresh batch of earnings reports. Texas Instruments (TXN) led the way, posting net profits of 38 cents a share, vs. 25 cents a share last year. The company also said it sees revenue between $3.2 billion and 3.5 billion in the third quarter, that it plans to raise dividends by 20%, and that it is setting a $2 billion stock buyback.

Lockheed Martin (LMT) saw a 56% increase in second quarter profit vs. a year ago, due to a strong performance from its systems and information-technology units. The aerospace company posted earnings of $461 million, or $1.02 a share, vs. 66 cents a share last year.

Verizon (VZN) reported second-quarter earnings of 63 cents a share, vs. 64 cents a share last year. This excluded one-time items, like the $336 million sale of its Hawaii local telephone business. Higher operating costs offset a 4.6% rise in consolidated revenue.

Shares of DuPont (DD) fell by more than 6% after the company reported a 5% rise in revenue and earnings of 90 cents a share in the second quarter, excluding one-time gains. The earnings figure was significantly lower than expected. Standard & Poor's reiterated its hold rating on the stock.

Avaya (AV) announced third-quarter earnings after the close Monday. The company reported earnings of $194 million, or 40 cents per share, vs. 13 cents per share last year.

Cendant (CD) also announced earnings after the close of trading Monday. The hotel and car rental company reported net profits of $387 million, or 36 cents a share, a 44 percent drop from a year ago. The company reaffirmed its forecasts for 2005 and 2006, however.

After the close Tuesday, Sun Microsystems (SUNW) posted second-quarter results. The server maker reported earnings of $121 million, or 4 cents a share, vs. 23 cents a share last year. Excluding one-time charges, earnings were 6 cents a share. This topped analyst expectations.

Electronic Arts (ERTS)also reported second-quarter results after the close. The video game company saw a first quarter net loss of $58 million, or 19 cents a share, vs. earnings of 8 cents a share during the same period last year. The company also lowered its earnings estimate for the 2006 fiscal year.

Crude oil prices finished higher but down from session highs, as a late-day profit-taking run led oil prices to settle up 20 cents at $59.20. Earlier in the day, oil surged after BP acknowledged that its Thunder Horse project, which has been repaired from hurricane damage, will not likely see first production until next year. The gains were capped, however, as Iraqi production is running a bit higher than it has of late, notes S&P MarketScope.

b>Treasury Market

Treasury prices were narrowly mixed Tuesday as the U.S. dollar recovered amid signs China won't revalue its currency at a rapid pace. That could mean the central banks of China and other Asian nations will not cut back soon on purchases of Treasuriess. The auction of $6 billion in inflation adjusted Treasury securities, known as TIPS, was "okay", according to Action Economics. The soft consumer confidence figure had little impact on Treasuries. The 10-year note yield finished at 4.23%.

World Markets

European stock markets finished mixed Tuesday. London's FTSE 100 index was down 14.50 points, or 0.28%, to 5,256.20.

Germany's DAX index rose 0.79 points, or 0.02%, to 4,843.49.

In Paris, the CAC 40 index lost 1.34 points, or 0.03%, moving to 4,420.78.

Asian markets closed lower on Tuesday. In Japan, the Nikkei index closed down 24.69, or 0.21%, at 11,737.96.

In Hong Kong, the Hang Seng index lost 24.10 points, or 0.16%, moving to 14,769.93.


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