Another promising start for the stock market dribbled away today as investors were scared off by rising interest rates and disappointing corporate profits.
Today the quarterly reports of Amazon.com and Boeing drew scrutiny from skeptical investors who lamented that both companies are slowing down.
Amazon's sales continue to grow -- to $1.86 billion from $1.46 billion -- but profits shrank to $30 million from $54 million. Boeing's $1 billion profit was more than double what the airplane manufacturer made a year ago. But much of the additional profit came from one-time gains -- including the sale of a rocket-making business -- not from ongoing operations.
The profit disappointments continued after the bell when Anheuser Busch reported profits fell 24 percent from $684 million to $517 million. The big brewer has cut prices of Budweiser and other beers this year in an unsuccessful effort to boost sales.
Taking a broader look at the market reveals more companies are beating their profit forecasts than falling short of them, but Wall Street lately is focusing on the underachievers -- not the unexpected profits.
The stock market is also acting as if rising interest rates are a surprise, professing disappointment today that the new Federal Reserve chairman, Ben Bernanke, will continue Alan Greenspan's policy of cranking up rates.
In the bond market, rates on 10-year Treasury bonds returned to the peak they hit in the spring and rates on 2-year bonds climbed to their highest in four years. The short-term bonds are paying 4.365 percent, the rate is 4.589 percent on the 10-year bond, which serves as the benchmark for mortgages and many other loans.
Since the Fed has been pushing up interest rates for the past year, and Bernanke was chosen to continue Greenspan's policies, none of this should be unexpected.
But "accentuate the negative" is the stock trader's song this week, so the markets are sagging.
Today the Dow Jones industrial average fell 33 points to 10,344.98, the Standard & Poor's 500 stock index slipped 5 to 1,191.38 and the Nasdaq Stock Market composite index lost 9 points to 2,100.05.