From combined dispatches
NEW YORK (AP) — Stocks finished a quiet session moderately lower yesterday as investors grappled with concerns about the health of corporate profits after Wachovia posted disappointing quarterly results.
Investors paused after a sell-off Friday and ahead of a raft of quarterly results and economic data arriving this week.
Wachovia surprised investors by posting a first-quarter loss of $393 million and cutting its quarterly dividend by 41 percent to 37.5 cents. The bank, which analysts had expected to post a profit, also said it plans to raise $7 billion through a stock offering.
But investors appeared to find some encouragement in the session from a better-than-expected report on retail sales.
"We obviously came out with more bad financial news," said Ryan Detrick of Schaeffer's Investment Research, referring to the Wachovia report. "The flip side is we had retail sales come in a little better than expected. It seems like they kind of negated each other."
The Dow Jones Industrial Average fell 23.36, or 0.19 percent, to 12,302.06.
The Standard & Poor's 500 Index fell 4.51, or 0.34 percent, to 1,328.32, and the technology-laden Nasdaq Composite Index fell 14.42, or 0.63 percent, to 2,275.82. The Russell 2000 Index of smaller companies dropped 0.3 percent to 686.07.
Bond prices edged lower. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.51 percent in late trading from 3.48 percent late Friday.
Light, sweet crude rose $1.62 to settle at a record $111.76 per barrel as the dollar fell, helping drive prices higher.
Gold prices turned higher, and the dollar was mixed against other major currencies.
Investors sold off shares of financials, led by Wachovia, which fell $2.26, or 8 percent, to $25.55. Citigroup Inc., which is due to report its quarterly results Friday, fell 85 cents, or 3.6 percent, to $22.51.
Mr. Detrick noted that the Wachovia news compounded investors' concerns about the banking sector following a report Friday from General Electric Co. GE, seen as a bellwether of big business and the broader economy, said its financial services business was challenged in the first quarter by the slowing U.S. economy and difficult capital markets.
Meanwhile, Northwest Airlines pilots have threatened to oppose a combination with Delta Air Lines, but officials were nonetheless mobilizing to announce a deal to create the world's biggest airline as early as today — provided the boards of the two companies give final approval to the deal, people familiar with the talks said Sunday. Northwest rose 26 cents to $11.22, while Delta advanced 47 cents, or 4.7 percent, to $10.48.
A rally in energy companies briefly led the market higher after oil prices advanced to a record, a government report showed gas-station receipts propped up sales at retailers last month, and the head of Brazil's oil agency said the offshore Carioca prospect may be the world's third-largest field.
Citigroup fell 85 cents to $22.51, for the second-biggest decline in the Dow. Merrill Lynch cut its earnings estimates for this year and next, citing a slowdown in consumer finance and capital-markets growth.
Financial shares in the S&P 500 slid for a fifth day to the lowest since March 17, when the group of banks, brokers, insurers and real-estate investment trusts dropped to an almost five-year low.
"There are lots more writedowns still to happen," said Andy Lynch, who manages $2.9 billion at Schroder Investment Management in London. As consumer spending slows, "banks are going to start losing money on consumer credit even more than they have so far."
News Corp., the media company controlled by Rupert Murdoch, fell the most in five years, losing 85 cents, or 4.6 percent, to $17.57. Sanford C. Bernstein and UBS AG cut their outlook, citing concerns growth will slow.
Bernstein's Michael Nathanson in New York reduced his 12-month share-price target to $21 from $24 and lowered his rating to "market perform" from "outperform" in a note today. UBS's Michael Morris cut his price projection to $25 from $26.
Scotts Miracle-Gro Co. lost 88 cents to $33.56. The maker of Miracle-Gro plant food said second-quarter profit fell following a late start to the growing season. Earnings will be about $1.14 to $1.18 a share in the three months through March 29, compared with $1.40 a year earlier, Scotts said.
Exxon, the largest U.S. oil company, led energy companies to a 1.8 percent gain as crude oil surpassed last week's record closing price, rising $1.62 to $111.76 a barrel. Exxon added $1.08, or 1.2 percent, to $89.70 for the biggest gain in the Dow.
Hess Corp., the fifth-largest U.S. oil company, rose the most in the S&P 500 after the head of Brazil's National Oil Agency said an offshore oil field known as Carioca being explored by Brazil's state-controlled oil company may be the world's third-largest. A spokesman for Petroleo Brasileiro SA, or Petrobras, said the company is still studying the find. Hess, which owns a 40 percent stake in an adjacent field, rose $8.43, or 9.1 percent, to $101.19.
Transocean Inc., the world's largest offshore oil and gas driller, rose $6.81 to a record $151.89. Noble Corp., the largest U.S. drilling contractor working off Mexico's coast, added $2.48 to $55.25.
IBM added $1.28 to $117.28. Goldman raised its share-price forecast and earnings estimates for the world's largest computer- services company.
Hewlett-Packard Co. rose 35 cents to $45.82. Merrill added the world's largest maker of personal computers to its "U.S. 1" list "because it is a defensive, large-cap, diversified play" that's likely to show margin improvement, analysts led by Jeff Fidacaro wrote in a report.
Northwest Airlines Corp. and Delta Air Lines Inc. led airline shares higher after people familiar with the talks said a merger of the two to create the world's largest carrier may be announced as early as tomorrow. Northwest, the fifth-largest U.S. carrier, rose 26 cents to $11.22. Delta, the third-biggest, gained 47 cents to $10.48.
NutriSystem Inc. added $1.31 to $19.52. The weight-loss company will be added to the S&P SmallCap 600 Index after the close of trading tomorrow, replacing Frontier Airlines Holdings Inc., Standard & Poor's said. Frontier filed for bankruptcy last week.