Market Update: Dow, Nasdaq Dragged Down at Midday

Major indices dip lower, ending four days of market gains.
By Diane Hess ,

(Updated from 11:27 a.m.)

After four days of stock market fever, investors were sweating a bit today.

The latest signals from corporate America have encouraged Wall Street that earnings may be bottoming. But ahead of

Intel's

(INTC) - Get Report

midquarter update with analysts tomorrow, investors aren't expected to make too many bets. "Big announcements tend to keep people on the sidelines," said Bob Basel, director of listed trading at

Salomon Smith Barney

. "I expect volume to be semi-muted today."

Since last Wednesday, stocks had been powering higher on relatively low volume. The

Nasdaq Composite Index, which fell below the flatline shortly after the opening bell, was lately off 18 points, or 0.8%, to about 2216. As of yesterday's close, it was ahead 3.9% for the week. The index, which is heavily weighted with technology stocks, is up 36.3% from its low of 1638.8 on April 4, but still 56% lower than its record close of 5048.62 hit last March.

The

Dow Jones Industrial Average was lately down nearly 72 points, or 0.6%, to about 11,104. Since touching a two-year low of 9,389 on March 22, the

blue-chip index is up 19% as of yesterday's close. It's only 4.7% off its all-time high of 11,722.98, which it hit in January 2000. The biggest help to the Dow today:

Procter & Gamble

(PG) - Get Report

, which climbed 2.4% to $65.64 after

Lehman Brothers

upgraded the consumer-products maker to buy from market perform. But weakness in

ExxonMobil

(XOM) - Get Report

and other stocks was putting a bigger drag on blue-chips.

Last week,

Sun Microsystems

(SUNW) - Get Report

ushered in the season of second-quarter confessionals when it cautioned it would miss performance targets. But since then, there haven't been any other major preannouncements -- and there have even been positive words from the likes of chipmaker

Xilinx

(XLNX) - Get Report

and telecommunications-equipment provider

Lucent

(LU)

.

All Eyes on Intel

The market awaits further confirmation about earnings from Intel, a bellwether technology company. Over the past three quarters, the semiconductor manufacturer has warned of revenue shortfalls in its midquarter updates. This morning,

Credit Suisse First Boston

analyst

Charlie Glavin said he expects the company will again lower guidance. CSFB's report follows those of Lehman's

Dan Niles and

Morgan Stanley's

Mark Edelstone, both of whom cautioned last week that Intel might disappoint.

In recent trading, Intel was up 0.8% to $29.96, while the

Philadelphia Stock Exchange Semiconductor Index

was off 1.3%.

In other news today,

priceline.com

(PCLN)

was soaring 22% to $6.65 on news that

Cheung Kong Holdings

and

Hutchison Whampoa

are buying 25 million shares of the company from founder Jay Walker and his trust. The additional shares will give the companies a 30% stake in priceline and the right to two additional seats on its board. Cheung Kong and Hutchison are both controlled by Hong Kong's wealthiest man, Li Ka-Shing.

Oil-refining company

Frontier Oil

(FTO)

was also climbing after it preannounced to the upside Tuesday night. The company said it expects to post second-quarter earnings figures well above current estimates. Frontier was recently up 10.7% to $15.45, a new 52-week high.

Ministers of the Organization of Petroleum Exporting Countries, or

OPEC

, met yesterday in Vienna and decided to leave their oil output at its current levels. But the cartel said it would meet again on July 3 to consider increasing production if Iraq's suspension of oil exports continues. In general, oil stocks were falling.

Internet stocks and computermakers were squeaking higher. But across the board, major sectors of the market were sliding, including cyclical names, financials and retail. The

American Stock Exchange Pharmaceutical Index

was 0.8% lower.

Drug giant

Bristol-Myers Squibb

(BMY) - Get Report

said Tuesday night that its board had approved an increase of $2 billion in its stock-buyback program. The company is also reportedly close to buying the drug business of

DuPont

(DD) - Get Report

. Bristol-Myers was declining 0.8% to $57.46, while DuPont was advancing 0.1% to $46.73.

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