By Mark Cotton
NEW YORK (Dow Jones) – U.S. stocks dipped Thursday as investors weighed a mixed batch of quarterly results and economic reports, with Pfizer a notable decliner after the drug giant cuts its 2005 profit outlook.
The Dow Jones Industrial Average (DJI) was off a morning high of 10,428.08 as it struggled to build on a triple-digit gain booked in the prior session.
The Nasdaq Composite Index (RIXF) and the S&P 500 Index (SPX) were both at their lows for the session.
“Earnings are supporting the market, with inflation still a concern,” said Barry Hyman, equity market strategist at Ehrenkrantz King Nussbaum.
Hyman said ,however, the fall in oil prices over the last week have helped take some of the edge off those inflation worries.
Crude prices extended a prior-session decline on expectations Hurricane Wilma will likely miss the bulk of Gulf’s energy facilities. Weekly data showing a rise in petroleum supplies as well as a drop in demand further weighed on crude.
The benchmark November contract was down 61 cents at at $61.80 in New York trading. The December contract, which becomes the lead contract after the market close, was off 36 cents at $61.15.
On the data front, first-time filings for state unemployment benefits fell to their lowest level in more than six weeks.
On a less positive note, a gauge of future U.S. economic activity declined in September for the third month in a row, indicating slower growth for the rest of the year, the Conference Board said.
Its index of leading economic indicators fell 0.7% in September, as the impact of the hurricanes in the Gulf began to be filter through. Economists had been expecting the index to fall 0.5%, according to a survey conducted by Dow Jones.
On the bond market, long-term Treasury prices fell, sending yields higher as the jobless data showed the economy in solid health, making it unlikely the Fed would pause or stop in its cycle of interest-rate hikes.
The benchmark 10-year note was down 7/32 at 98 2/32, with its yield at 4.49%.
On the currency markets, the dollar traded higher against its major counterparts, with the prospect of higher U.S. interest rates down the line supporting the currency.
The euro eased 0.25% to $1.1952. Against the Japanese yen, the greenback rose 0.2% to 115.53.
Gold futures edged higher, bouncing off a five-week low reached in the prior session. The benchmark December contract was up $1 at $466.80 an ounce.
Wall Street continued to take the pulse of corporate America as the nation’s companies rolled out their quarterly results.
Pfizer Inc. (PFE) tumbled as much as 8.2% in early trading after the world’s largest drugmaker posted a 52% decline in third-quarter profit and lowered its 2005 outlook. It also withdrew its forecasts beyond 2005, citing lower prescription growth and increased competition in key U.S. market. The stock, the most actively traded on Instinet, was down 5.1% at $22.74.
Fellow Dow component McDonald’s Corp. (MCD) posted an in-line third-quarter profit, but revenue came in ahead of analyst estimates, helped by demand for premium chicken sandwiches and an improving sales environment in Europe. The stock fell as much as 69 cents out of the gate.
Coca-Cola Co. (KO), another member of the blue-chip index, reported earnings and revenue that came in ahead of Wall Street expectations. The stock rose as much as 2.7% in morning trading.
Wrapping up earnings in the Dow, SBC Communications Inc (SBC) booked an adjusted third-quarter profit that topped analyst estimates. The telecom company said it added a record 528,000 high-speed Internet users in the quarter. The stock gained as much as 2.6% in early trading.
Nokia Corp. shares (NOK) tumbled more than 5% after the world’s largest maker of mobile phones posted forecast-beating quarterly earnings, but offered a less than upbeat outlook for its struggling network division. U.S-listed shares of the Finnish company were down 4.6% at $16.27 in pre-market dealings.
In the Internet space, shares of eBay (EBAY) lost as much as 3.8% after the online auctioneer offered up a profit view for 2005 that fell short of analyst expectations.
Ford Motor Co. (F) shares fell as much as 9 cents to $8.38 as Chief Executive Bill Ford warned the automaker will continue to face “many challenges” in an environment that remains competitive and difficult.
His warning came as the company posted a quarterly loss in line with analyst estimates. The auto maker also forecast 2005 earnings before special items at the low end of its prior guidance range of $1 to $1.25 a share. First Call had forecast earnings of $1.05 a share.
In broker action, shares of The Home Depot Inc. (HD) gained after Bear Stearns upgraded the home improvement retailer to outperform from peer perform, saying IT investments are driving margin expansion opportunities and earnings per share. The broker added its Home Depot Supply unit will provide the next leg of topline growth.
(END) Dow Jones Newswires