Stocks Head South on Yield Jitters

By sector, the Amex Airline index finished up 1.6% Tuesday, thanks to a 5.1% jump in Continental Airlines(CAL - Cramer's Take - Stockpickr). Also, JetBlue Airways(JBLU - Cramer's Take - Stockpickr) was higher by 4.1%, and AMR(AMR - Cramer's Take - Stockpickr) gained 1.2%.

Meanwhile, the Philadelphia Stock Exchange Semiconductor Sector Index was lower by 1.3% despite a 2.3% rise in Advanced Micro Devices(AMD - Cramer's Take - Stockpickr). The Philadelphia/KBW Bank Sector index lost 0.8% while the Amex Oil index fell by 2.8%.

Stocks were narrowly mixed in the week before Christmas. For the year, the S&P 500 remains the best-performing of the three main indices, up about 4.6%. The Dow Jones Industrial Average is up 0.9% year to date, while the Nasdaq Composite has risen 3.3%.

According to the International Council of Shopping Centers, major retailers are expected to report same-store sales gains for December of 3% to 3.5%, led by discounters and electronics retailers. Wal-Mart(WMT - Cramer's Take - Stockpickr) confirmed over the weekend that its December comps should rise in line with its previous estimate of 2% to 4% compared with a year ago.

Overstock.com(OSTK - Cramer's Take - Stockpickr) revised its expectations for 2005, saying it expects results 1% to 2% below its previous outlook of break-even earnings. The online retailer still expects revenue growth to be within its range of 60% to 100% over 2004. Overstock.com dropped $2.49, or 7.4%, to finish at $31.15.

Another big stock market story involved Guidant(GDT - Cramer's Take - Stockpickr), the pacemaker giant that is currently the subject of a takeover battle between Boston Scientific(BSC - Cramer's Take - Stockpickr) and Johnson & Johnson(JNJ - Cramer's Take - Stockpickr). Citing consumer anxiety over device malfunctions, Guidant forecast fourth-quarter earnings of 17 cents to 23 cents a share on sales of $790 million to $820 million. Analysts had been expecting earnings of 49 cents a share on sales of $928.4 million.

Guidant slid $2.29, or 3.4%, to $64.69. Boston Scientific lost 77 cents, or 3%, to $25.07.