Monday's Corporate News Looks Discouraging

Updated from 3:14 p.m. EST

While complications on the road to Baghdad dragged the stock market lower, investors got little encouragement on the corporate news front.

Altria (MO Quote) fell after a judge ordered the company to pay $7.1 billion in compensatory damages to smokers for having deceived them into thinking "light" cigarettes were less harmful. Altria, which used to be called Philip Morris, also will pay $3 billion in punitive damages to the state of Illinois. Altria closed down 4.14% at $33.59.

Shares of retailers slid amid reports that shoppers stayed at home over the weekend to watch the war on television. Wal-Mart(WMT Quote) lost 3.60% to $52.70, J.C. Penney(JCP Quote) shed 4.96% to $20.29 and Federated Department Stores(FD Quote) slid 6.08% to $27.96. All three companies said sales for the weekend were lower than expected. But despite the decline, Wal-Mart said sales growth was expected to be steady for March and April.

After a big rally Friday, the major airlines closed down following a nearly 5% jump in oil prices in New York and London. News of Hawaiian Airlines' (HA Quote) demise also spooked the market. Even though the government is debating an aid package, AMR(AMR Quote) ended off 15.13% to $2.02, while Continental (CAL Quote) shed 17.13% to $5.64 and Delta(DAL Quote) fell 16.53% to $9.39.

Despite declines in the broad market, defense shares recovered from recent losses, as investors speculated that the current conflict could extend the demand for war-related equipment. Shares of Northrop Grumman(NOC Quote) gained 2.66% to end at $84.64, while Lockheed Martin rose 2.16% to $46.39.

Another sector saw buying interest Monday: gold mining. Royal Gold (RGLD Quote), Durban Deep (DROOY Quote) and Pan American Silver (PAAS Quote) ended higher, as investors flocked to gold's perceived safety. After selling off last week, Royal Gold gained 5.12% to $13.75, Durban Deep added 3.43% to $2.41, but Pan American Silver closed down 1.03% to $5.75.

Citigroup (C Quote) Chief Executive Sandy Weil withdrew his nomination to the New York Stock Exchange board of directors amid criticism that he wouldn't truly represent the interests of small investors, according to media reports. Citigroup fell 3.90% to $35.75 amid broad weakness in financials.