U.S. Stocks Trim Gains Amid Retail Warnings
NEW YORK (MarketWatch) -- U.S. stocks posted modest gains on Tuesday, with investors weighing enthusiasm about Apple Inc.'s profits against weakness in the retail sector, sparked by Target Corp.'s lowered guidance and Wal-Mart Stores Inc.'s cutting its capital spending forecast.
"The market is trying to get readjusted for slower economic growth, and Apple can only do so much," said Robert Pavlik, chief investment officer at Oaktree Asset Management.
Target's lowering its guidance and "what Wal-Mart is saying at its shareholder meeting that is dragging the rest of retailers down," said Art Hogan, chief market strategist at Jefferies & Co.
The Dow Jones Industrial Average was recently up 7.9 points at 13,574.9, with 20 of its 30 components in positive territory, led by American Express Co. , up 1.4% after the credit-card and travel-services company tallied an 11% rise in profits for the third quarter.
Wal-Mart , a Dow component and the nation's biggest retailer, on Tuesday said it plans to trim capital expenditures for the current fiscal year more than forecast. Its stock dropped nearly 3.1%.
Also weighing on the retail sector was Target's weaker October sales forecast, a move that prompted analysts to trim their per-share estimates on the discount retailer. Shares of Target fell 1%.
The S&P 500 rose 1.84 points to 1,508.17, while the Nasdaq Composite advanced 12.81 to 2,766.74.
Volume on the New York Stock Exchange topped 579 million, and advancing stocks outran declining issues 17 to 14. On the technology-laden Nasdaq, more than 1.1 billion shares exchanged hands, and declining stocks ran just ahead of those advancing.
"It's all about earnings today," said Peter Cardillo, chief market economist at Avalon Partners.
"However, some of the early strength may fade, as some of the geopolitical problems heat up again, with the dollar resuming its slide and oil prices picking back up," Cardillo said.
"Favorable earnings results from Apple, DuPont and AmEx overnight still managed to overshadow fresh concerns about credit related write-offs in the financial sector," said analysts at Action Economics.
"Media reports overnight focused on Merrill Lynch's third-quarter earnings announcement (scheduled for Wednesday), mulling more write-offs related to credit issues," said the Action Economics analysts.
Stock of the New York brokerage was off 1.8%.
Incoming
Ahead of the opening bell, blue-chip DuPont , the nation's second-largest chemical maker, said its earnings rose 8.5% in the third quarter, bolstered by international and agriculture growth.
Shares Apple rose about 7% after the consumer-electronics company reported a 67% increase in earnings in the fourth quarter on solid iPod and iPhone sales. .
Other companies reporting earnings include AT&T Inc. , which matched expectations. .
Shares of conglomerate 3M Co. led the few Dow decliners, its stock falling 0.9%.
Oil giant BP Plc reported a 29% drop in third-quarter profit, but still beat forecasts, after a widely leaked internal company memo warned of "dreadful" results.
On the New York Mercantile Exchange, crude-oil futures for December delivery fell 66 cents to $85.36. .
Elsewhere on the NYME, gold futures gained $1.90 to $761.90. .
The dollar was mixed, slipping against the euro but gaining on the yen, with the dollar index, which measures the U.S. unit against a basket of major currencies, was down about 0.6% at 77.600, compared with 77.955 late Monday. .
Overseas, European shares advanced as a recovery in industrial and mining shares helped restore confidence after the previous day's sharp sell-off.
On Monday, Wall Street bounced back, with technology shares leading the way, with the Dow adding 44 points, the Nasdaq gaining 28 points and the S&P rising 5 points.
By Kate Gibson