A weak profit outlook from 3M disappointed Wall Street on Monday, leaving stocks mixed as investors grew worried that second-half profits will fall short of expectations. Technology shares eked out minimal gains in advance of Microsoft's earnings later in the week.
While second-quarter earnings, including 3M's, have generally beaten estimates, investors are now focusing on the rest of 2004, worried that profit growth will slow even as interest rates rise and consumer spending drops off.
"We're looking at these outlooks hoping for some kind of sign on what the economy's going to do in the third and fourth quarter, and nobody wants to jump until then," said Bill Groenveld, head trader for vFinance Investments. "Right now, there's no volume, no trends to follow. People like to follow trends, but nobody's sticking their neck out to make one."
Many investors were waiting for Federal Reserve Chairman Alan Greenspan's testimony before a Senate committee on Tuesday and Microsoft's earnings, due late Thursday.
The Dow Jones industrial average fell 45.72, or 0.5 percent, to 10,094.06. The Standard & Poor's 500-stock index slipped 0.49, or 0.04 percent, to 1100.90. The tech-heavy Nasdaq composite index, which was heavily sold off over the past two weeks, rose 0.68, or 0.04 percent, to 1883.83.
While 3M beat its second-quarter profit estimates by a penny, the manufacturing giant said its third-quarter profit would be slightly lower than expected, taking many investors by surprise. 3M tumbled $4.79, to $83.05.
The negative outlooks, which have come from a variety of sectors, from the largest to smallest companies, have put investors on edge, analysts said, leaving little chance for stocks to break higher in the short term.
Kraft Foods rose 83 cents, to $31.13, after its earnings came in as expected, though the company saw a dip in overall profit because of higher production costs. Parent company Altria Group, another Dow component, rose 16 cents, to $48.83.
Occidental Petroleum saw its earnings surge 55 percent in the quarter because of higher energy prices, even as it announced the retirement of its president. Occidental fell 47 cents, to $50.00.
Wal-Mart Stores reiterated its projections for June sales, which are expected to increase between 2 percent and 4 percent, most likely at the low end of that range. Wal-Mart climbed 21 cents, to $52.86.
Black & Decker surged $7.17, or almost 12 percent, to $67.49, after blowing past its Wall Street estimates by 25 cents per share. The toolmaker credited the increase on higher sales volume and savings from restructuring.
* The New York Stock Exchange composite index fell 9.36, to 6446.66; the American Stock Exchange index fell 9.78, to 1263.18; and the Russell 2000 index of smaller-company stocks fell 0.75, to 554.73.
* Advancing issues outnumbered declining ones by 9 to 8 on the NYSE, where trading volume fell to 1.31 billion shares, from 1.45 billion on Friday. On the Nasdaq Stock Market, decliners outnumbered advancers by 10 to 7 and volume totaled 1.75 billion, down from 1.77 billion.
* The price of the Treasury's 10-year note was unchanged, and its yield remained at 4.36 percent.
* The dollar fell against the Japanese yen and rose against the euro. In late New York trading, a dollar bought 108.23 yen, down from 108.68 late Friday, and a euro bought $1.2439, down from $1.2458.
* Light, sweet crude oil for August delivery settled at $41.64, up 39 cents, on the New York Mercantile Exchange.
* Gold for current delivery fell to $405.60 a troy ounce, from $406.60 on Friday, on the New York Mercantile Exchange's Commodity Exchange.