Stocks end mixed on worries over profits
NEW YORK -- Investors' growing angst about company earnings gave stocks a mixed finish Tuesday, with the Dow Jones industrials suffering their fifth straight loss. The broader market indicators closed modestly higher.
The concern on Wall Street is that the recession will have a more severe impact on profits than investors have been anticipating. They shied away from placing big bets after aluminum giant Alcoa reported late Monday that it lost $1.19 billion during the fourth quarter. An analyst's warning about profits at General Electric only added to the market's uneasiness.
Questions about earnings — in particular companies' expectations for business this year — are likely to dominate trading in the coming weeks. Computer chipmaker Intel and drug company Genentech are among the companies reporting results this week.
The market also will get an earlier-than-expected reading on the financial sector when JPMorgan Chase reports earnings on Thursday — nearly a week ahead of schedule. Investors are fearful of another year of multibillion dollar losses among financial companies, as analysts forecast mounting problems in credit card and commercial real estate portfolios.
Meanwhile, Citigroup and Morgan Stanley are expected to announce a deal soon to combine their brokerage operations as Citi struggles to raise additional cash.
"We're sort of in a wait-and-see mode," said Carl Beck, partner at Harris Financial Group. "The optimism that we saw at the beginning of the year has sort of been put on hold as people await earnings reports over the next couple of weeks."
The Dow fell 25.41, or 0.30%, to 8,448.56. Both Alcoa and GE weighed on the blue chips.
Broader indexes advanced. The Standard & Poor's 500 index rose 1.53, or 0.18%, to 871.79, while the Nasdaq composite index rose 7.67, or 0.50%, to 1,546.46.
The Russell 2000 index of smaller companies rose 4.99, or 1.06%, to 473.79.
Losing stocks outnumbered gainers by about 8 to 7 on the New York Stock Exchange, where volume came to 1.31 billion shares.
