Stocks were trading lower Tuesday afternoon, as elevated Treasury yields fueled concerns of interest rate hikes. Weaker-than-expected sales guidance from Texas Instruments (TXN) also weighed on sentiment, says Standard & Poor's MarketScope.
In afternoon trading, the Dow Jones industrial average edged lower 5.04 points, or 0.05%, to 10,953.55, despite gains by Honeywell (HON) and Procter & Gamble (PG). The broader Standard & Poor's 500 index slipped 4.79 points, or 0.37%, to 1,273.47. The tech-heavy Nasdaq composite index fell 20.66 points, or 0.9%, to 2,265.37.
Recent economic data seem unlikely to sway the Fed from its tightening cycle, some analysts say. Signs of strength in the labor market "should keep the Fed gradually pushing rates higher over the next three FOMC meetings," says John Ryding, chief U.S. economist for Bear Stearns.
Chip maker Texas Instruments (TXN) was lower in afternoon trading after the company said first-quarter sales would fall below the $3.38 billion expected. CIBC lifted the stock from sector performer to outperformer.
Among blue-chips, General Motors (GM) was higher after announcing changes to its pensions and other benefits for salaried employees. The auto maker said it aims to decrease financial risks.
In telecom, Sprint Nextel (S) was lower as the wireless provider said it will consider buying back stock and paying special dividends after separating its local communications unit. The news follows a busy Monday in the sector, as investors digested AT&T's (T) $67.1 billion deal for BellSouth (BLS) and M&A speculation refocused on rival Verizon Communications (VZ). UBS (UBS) upgraded BellSouth, while Citigroup (C) downgraded the stock and upgraded competitor Qwest (Q).
Also on the brokerage front, satellite radio concern Sirius (SIRI) got a boost as Bank of America (BAC) upgraded the stock from sell to neutral.
In other M&A news, Public Storage (PSA) agreed to acquire Shurgard Storage Centers (SHU) in a deal valued at about $5 billion.
Of other companies in focus, Krispy Kreme Donuts (KKD) soared 15% after naming Daryl Brewster president and CEO. Internet search giant Google (GOOG) was lower after a report that the company aims to act as a hard drive for users' files.
Market players were also monitoring disappointing economic data Tuesday. Fourth-quarter productivity growth was revised higher to -0.5% from the previously reported -0.6%, compared to an expected -0.2%. It was the first productivity decline since the first quarter of 2001, says S&P MarketScope. January consumer credit is also on Tuesday's docket.
In the energy markets, April West Texas Intermediate crude oil futures fell $1.01 to $61.40 a barrel, as the Kuwait oil minister reportedly said OPEC aims to trim U.S. oil prices to less than $60.
European markets finished lower Tuesday. In London, the Financial Times-Stock Exchange 100 index fell 40.4 points, or 0.68%, to 5,857.4. Germany's DAX index stumbled 14.78 points, or 0.26%, to 5,739.28. In Paris, the CAC 40 index dropped 18.51 points, or 0.37%, to 4,992.21.
Asian markets finished lower. Japan's Nikkei 225 index fell 175.14 points, or 1.1%, to 15,726.02. In Hong Kong, the Hang Seng index dipped 209.47 points, or 1.32%, to 15,602.36. Korea's Kospi index lost 28.09 points, or 2.09%, to 1,316.67.
Prices for 10-year Treasury notes were slightly higher in afternoon trading at 98-04/32 with a yield of 4.74%, while 30-year bonds rebounded to 96-14/32 for a yield of 4.72%.