NEW YORK (AP):
SLUGGISH EARNINGS from Hewlett-Packard pressured Wall Street yesterday, although losses were limited as investors remained largely optimistic about a speedy economic recovery.
All three main indexes saw moderate declines on profit-taking in the morning after the Dow Jones industrials and the Nasdaq composite on Tuesday hit their highest levels in more than a year. But stocks later trimmed their losses; at the close, advancing issues also outnumbered decliners.
"It's a continuation of the slow, listless trading over the past week, but clearly the bulls are still in charge of the market," said Keith Keenan, vice president of institutional trading at Wall Street Access, a New York-based brokerage
firm. "Any downturn is met with buying."
The Dow Jones industrial average closed down 31.39, or 0.3 per cent, at 9,397.51, having gained 157 points in the previous four sessions to reach its highest close since June 20, 2002. Earlier in the day, the blue chips lost as much as 64 points.
The broader market also finished lower. The Nasdaq composite index slipped 0.57, or 0.03 per cent, to 1,760.54, after advancing 21 points to its highest level since April 19, 2002. The Standard & Poor's 500 index fell 2.05, or 0.2 per cent, to 1,000.30.
Dow component Hewlett-Packard slid $2.31, or 10.5 percent, to $19.80 after the computer maker reported earnings and sales that missed Wall Street's estimates. H-P cited weak demand and stiff competition from rival PC makers.
"Techs had a rally and Hewlett put a damper on that," said Todd Leone, managing director of equity trading at SG Cowen Securities.
Trading has been inconsistent in recent weeks as investors remain largely upbeat about an economic recovery but wonder whether the market's recent rally, which began in mid-March, might have come too fast. Volume also has been light as many traders are away for summer vacation.
Some analysts believe the market has the ability to drift higher in the coming weeks, but Keenan said he expects a "healthy pullback."
"There's a significant amount of complacency in the market. It's a function of being in a trading range for a while," he said. "Once we get evidence of some significant bumps in the road of economic recovery, the equity markets will weaken."
Pfizer lost 53 cents to $30.74 after the Food and Drug Administration approved the sale of the Levitra impotence treatment in the United States by Bayer AG and GlaxoSmithKline. The drug will compete with Pfizer's Viagra pill.
Gainers included Network Appliance, which jumped $2.83 to $20.88, after the data storage equipment maker reported a 67 percent jump in quarterly earnings that beat analysts' expectations.
Advancing issues outnumbered decliners 5 to 4 on the New York Stock Exchange. Volume came to 1.20 billion shares, compared with 1.30 billion traded Tuesday.
The Russell 2000 index, a barometer of smaller company stocks, rose 0.76, or 0.2 percent, to 489.46.
