- The Washington Times - Wednesday, October 14, 2009

NEW YORK | Investors grew cautious Tuesday after quarterly sales from Johnson & Johnson fell short of expectations and an influential analyst warned that bank shares are overheated.

Most stocks posted modest losses Tuesday, a day after major indexes finished at their best levels in a year. The Dow Jones Industrial Average slipped 15 points, though the Nasdaq Composite Index edged higher.

J&J; was the first in a parade of big companies to report quarterly results this week, and a 5 percent drop in sales at the maker of health care products stirred concerns that companies have had to rely on cost-cutting to boost profits, as they did in the first half of the year.

Investors are worried that earnings will suffer if sales don’t improve.

Health care stocks stumbled after J&J;’s report and as the Senate Finance Committee approved a version of the health care overhaul bill. The bill moves to the Senate floor for debate.

The Dow fell 14.74, or 0.2 percent, to 9,871.06. The Standard & Poor’s 500 Index fell 3.00, or 0.3 percent, to 1,073.19, its first loss after six days of gains. The Nasdaq rose 0.75, or less than 0.1 percent, to 2,139.89.

In other trading, the dollar fell against other currencies, sending commodities higher. Bond prices rose, recovering some of the steep losses from last week.

J&J; fell $1.52, or 2.4 percent, to $61.01.

The ICE Futures U.S. dollar index, which measures the dollar against other major currencies, dropped to a 14-month low. Gold subsequently hit a record high $1,069.70 an ounce, while oil rose 88 cents to settle at $74.15 a barrel on the New York Mercantile Exchange.

Bond prices rose, pushing yields down. The yield on the benchmark 10-year Treasury note fell to 3.33 percent from 3.38 percent late Friday. Bond markets were closed Monday in observance of Columbus Day.

The Russell 2000 Index of smaller companies fell 2.11, or 0.3 percent, to 611.70.

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