U.S. Stock Indexes Lower On Cautious Corporate Guidance
NEW YORK (MarketWatch) -- U.S. stocks on Tuesday scaled back an opening slide that had the technology sector especially hammered by disappointing earnings reports and bleak forecasts from chip maker Texas Instruments Inc. and chemical giant DuPont.
"The real problem is not so much the earnings themselves, but the guidance, which is murky," said Peter Cardillo, chief market economist at Avalon Partners.
Off lows that had it down nearly 200 points at the start, the Dow Jones Industrial Average was more recently trading 2.23 points lower at 9,263.2.
In addition to information technology, energy proved the hardest hit sector, with oil giants and Dow components Exxon Mobil Corp. and Chevron Corp. both down about 3% as crude futures fell to under $72 a barrel.
Shares of Caterpillar Inc. edged up after the heavy-equipment maker reported a third-quarter profit decline of 6% from the year-ago period, but held firm to its previous target of $6 a share profit for 2008.
American Express Co. gained 1.6% after it reported a smaller-than-forecast 24% profit fall for the third quarter late on Monday.
DuPont slipped 3.3% after cutting its earnings outlook.
Pfizer rose 2% after tripling its third-quarter profit. Also on the rise, 3M shares advanced after the diversified industrial behemoth reported a third-quarter profit gain of 5.8%. .
The S&P 500 fell 1.24 points to 984.16 and the technology-heavy Nasdaq Composite declined 2.29 points to 1,767.74.
Before the opening bell, stock futures had pared declines on word of a new Federal Reserve money market funding facility. .
But stock futures resumed their slide further into negative terrain after earning misses from the technology sector and on worries about the day's slated settlement of Lehman Brothers' credit default swaps.
"Settlement of Lehman's CDS's is what has the market on the nervous side. However, if the total amount of losses is less than the market is expecting, we could see a resumption of an upward trend that could take the Dow back above 10,000 in a short period of time," said Cardillo.
Outlook
Gloomy outlooks pressured Texas Instruments , its shares dropping 7.6%.
Sun Microsystems Inc. dropped 13.8% as the network-server firm forecast a bigger loss than analysts had anticipated.
After the close, Yahoo Inc. and Apple Inc. are scheduled to report results, with expectations that Yahoo will announce job cuts.
On Monday, U.S. equities surged after a key inter-bank lending rate dropped and after Federal Reserve Chairman Ben Bernanke endorsed a second stimulus package. The Dow Jones Industrial Average rocketed 411 points, the S&P 500 added 44 points and the Nasdaq Composite climbed 58 points.
By Kate Gibson