MarketWatch
U.S. stocks end lower; post third straight weekly loss
Friday January 21, 4:26 pm ET
By Mark Cotton
NEW YORK (MarketWatch) - U.S. stocks ended lower Friday, opening the year with a third straight week of losses for the first time since 1982, as strong results from General Electric and United Technologies could not dispel concern over a very mixed earnings picture.
ADVERTISEMENT
A report showing a surprise dip in consumer sentiment for January further unsettled investors in Friday trading.
The Dow Jones Industrial Average (^DJI - News) ended down 78.48 points, or 0.7 percent, at 10,392.99, while the Nasdaq Composite Index (NasdaqSC:^IXIC - News) fell 11.61 points at 10,392.99.
The S&P 500 Index (CBOE:^SPX - News) fell 7.54 points, to 1,167.87.
Turning back to Friday's Dow movers, losses for Procter & Gamble (NYSE:PG - News) , 3M (NYSE:MMM - News) and Boeing Co (NYSE:BA - News) weighed heavily on the index.
General Electric (NYSE:GE - News) saw early gains fade as its better-than-expected earnings failed to act as a bulwark against the broader market downturn. GE ended down 0.7 percent at $35.13, off an intraday high of $35.83.
United Technologies (NYSE:UTX - News) fared better, paring gains but closing out the session, up 0.3 percent, at $100.08.
Verizon Communications (NYSE:VZ - News) climbed 0.6 percent and Citigroup (NYSE:C - News) rose 0.3 percent, buoyed by broker upgrades.
"There was some unsettling news with regards to consumer sentiment and there is still the reverberation of some of the more disappointing earnings news this week, which more than anything else has proved troubling for the market," said David Sowerby, portfolio manager, at Loomis Sayles.
In morning trading, stocks came off early highs after researchers at the University of Michigan said consumer sentiment eroded in January.
The university's consumer sentiment index fell to 95.8 in January from 97.1 in December. The increase was below the consensus forecast of Wall Street economists who had expected sentiment to rise to 97.4.
Dollar, gold, bonds, oil
In the currency markets, the dollar extended its losses against the euro and turned lower against the Japanese yen as the weak sentiment data left some traders betting that the Fed might pause its policy of raising interest rates at a measured pace. See currency report .
Gold futures ended higher, marking their highest closing level since early January, as expectations of lasting weakness in the U.S. dollar and broad market uncertainty fueled investment and physical demand for the precious metal.
The benchmark February gold contract was up $4.30 at $426.90 an ounce.
Treasurys ended higher as the stock market pulled back with investors seeking the safety of fixed-income investments ahead of the weekend.
The 10-year benchmark note ended up 6/32 100 28/32, with its yield at 4.14 percent.
Crude futures ended higher after the Organization of Petroleum Exporting Countries lifted its 2005 demand forecast.
This week's cold snap in the U.S. coupled with expectations of an OPEC output cut and continuing violence in Iraq lent further support.
Oil for March delivery was up $1.22, at $48.53 a barrel. On the week, the contract ended unchanged.
Turning back to the broader market for equities, decliners had a 16 to 15 edge over advancers on the New York Stock Exchange, while losers outpaced winners by a wider 17 to 13 score on the Nasdaq.
Volume was 1.6 billion on the Big Board, and just over 2 billion on the Nasdaq.
On a sector-by-sector basis, energy (CBOE:^OIX - News) and oil service stocks (AMEX:^OSX - News) were the only two areas of the market posting solid gains, helped by a rise in crude oil prices.
Dow stocks in focus
GE posted forecast-beating fourth-quarter earnings, driven by 19 percent growth in industrial sales and a 16 percent increase in financial services sales.
The conglomerate also issued a "confident" outlook on 2005, saying it expects to achieve its 2005 growth goal. Yet GE's turned lower in late afternoon trading, dipping 0.7 percent in line with the broad market pullback.
Fellow conglomerate and Dow component United Technologies also reported quarterly earnings ahead of analyst estimates, while confirming expectations of earnings per share growth of 10 to 15 percent for 2005.
The company, which counts Otis elevators, Pratt & Whitney aircraft engines and Sikorsky helicopters among its businesses, saw its shares edge higher in morning trading.
In other news for Dow stocks, Hewlett-Packard Co (NYSE:HPQ - News) said it will pay $141 million to settle a four-year-old patent dispute with Intergraph Corp. (NasdaqNM:INGR - News) . HP said it expects the agreement to lower fiscal first-quarter earnings by around 3 cents. Hewlett-Packard's shares advanced 0.2 percent, at 19.99.
On the merger-and-acquisition front, Pfizer Inc (NYSE:PFE - News) has agreed to buy closely held Angiosyn Inc, a specialist in eye disease treatments, in a deal valued at as much as $527 million. The drug giant's shares fell 2 percent, to $24.48.
Goodyear Tire & Rubber Co. (NYSE:GT - News) was in focus after a Wall Street Journal report said the largest U.S. tire maker is considering cost-saving options for its North American operations that could include shuttering plants and cutting jobs. Goodyear has 12 North American plants.
A spokesman told the newspaper that no decisions have been made on restructuring actions. Goodyear shares ended down 1.8 percent.
Broker calls
Shares of Verizon Communications (NYSE:VZ - News) rebounded from a miserable start to the year after Deutsche Bank upgraded the company to "buy" from "hold," saying the recent decline in the stock represented a buying opportunity for investors.
The telecommunications services giant's shares, a component of the Dow industrials have lost around 10 percent since the end of 2004 due in large part to a number of negative analyst notes on the company's outlook.
Meanwhile, shares of Citigroup gained after Merrill Lynch upgraded the financial services group to "buy" from "neutral" on valuation grounds and its attractive dividend yield. Read ratings game on Citigroup, Verizon upgrades
Finally, Bear Stearns raised its 2005 earnings forecast for Apple Computer (NasdaqNM:AAPL - News) to $2.25 a share from $2.10, saying it does not expect any drop-off in demand for its iPod range of digital music players in the first quarter. Apple shares eked out a gain into the close, ending the session up three cents at $70.49. |
