(Updated from 11:10 a.m.)
Stocks swayed lower at the open on fears that companies reporting today after the market close -- and later this week -- would issue disappointing outlooks for future earnings.
Several banks reported decent earnings this morning. Companies scheduled to report after the close include tech heavyweights chipmakers
Applied Micro Circuits
as well as networking firm
But stocks were lately making an attempt at a comeback, with the
Dow tickling in the green and the
Nasdaq dabbling in the red. Some strong performances last week by the major indices gave a much-needed boost to investor sentiment.
Bank stocks were higher after the country's largest financial-services company,
Bank of New York
reported earnings that were in line with estimates.
Bank of America
missed lowered earnings expectations by a penny, but it, too, was on the up bandwagon.
Citigroup was lately up 1.5% to $53.94. Rising more steadily, Bank of New York was up 3.1% to $51.94, and Bank of America was 3.8% higher to $50.38. The
Philadelphia Stock Exchange/KBW Bank Index
was up 2.3% to 930.7.
An industrywide slowdown in some investment banking and securities brokerage areas, along with concerns about weakening credit quality -- which hurts banks' loan portfolios -- has investors worried that banks will have
bad news this earnings season.
Citigroup was adding almost 5 points of upside to the Dow, while
was contributing about 6 points. But the real leaders on the blue-chip index were defensive stocks -- consumer staples company
Procter & Gamble
and smokestack industrial
Minnesota Mining & Manufacturing
together were adding more than 22 points.
Blue-chip tech stocks were holding the Dow back, though. Intel was sinking, down 2.4%, ahead of its earnings report tonight and after news of its acquisition of
, while PC maker
was down 0.9% and
was tearing 3.2% lower.
Intel is buying Xircom for
$748 million. The company supplies PC cards and other products used to connect mobile computing devices to corporate networks and the Internet. Xircom was soaring, up 35.99%.
Despite weakness in most tech sectors, advancers were beating decliners by 19 to 16 on the Nasdaq exchange, indicating that there are buyers out there and that investors are picking and choosing their tech stocks carefully. Decliners were slightly ahead of advancers on the NYSE.
was the most actively traded stock on the Nasdaq after CEO John Chambers said this morning that the company would gain market share in an economic slowdown. Chambers made the comments at a conference of industry leaders in India. Cisco was up 1.3% to $38.56.
Internet stocks were also a popular cause with investors today. Recently merged mammoth
AOL Time Warner
was rising 0.2% to $46.56,
was up 2.4% to $27.19 and
TheStreet.com Internet Sector
index was 1.3% higher to 364.7.
Meanwhile, companies' slowing spending on substantial investments -- such as IT networks and equipment -- continues to take its toll on the communications sector. Chip and mobile-phone maker
and networking company
both announced layoffs yesterday. Motorola said it would close a plant in Harvard, Ill., laying off
2,500 workers. And 3COM said it was
planning to lay off as much as 20% of its workforce next month in order to cut costs. Motorola was slipping 3.4%, while 3Com lately was off 3.6% to $10.
Meanwhile, energy stocks were in the mud amid the ongoing California electricity crisis and ahead of OPEC's meeting tomorrow.
One of the state's biggest utilities,
Southern California Edison Co.
-- a unit of
-- may be cut off from power suppliers after saying it can't pay hundreds of millions of dollars it owes to the
California Power Exchange
. The exchange, however, is in talks with various parties in order to avoid cutting the company off from further power purchases. Edison International shares were falling 8.6%.
The surging cost of wholesale power in the state this year coupled with caps on what can be charged to consumers has squeezed the company's coffers. Both it and the Pacific Gas & Electric utility unit of
have said they are headed toward bankruptcy. PG&E was off 10.8%. The
American Stock Exchange Oil & Gas Index
was falling 0.7%.
The California crisis and concerns about energy costs in general have thrown the meeting of the OPEC ministers tomorrow into high relief. OPEC comprises representatives of the world's largest oil exporting nations. Market-watchers are expecting OPEC to cut output by 1.5 million barrels per day, which represents 5% of total output.
The U.S. is worried that the production cuts could force up energy prices, which would fuel inflation.
Elsewhere on the market, Ralston-Purina
was flying, trading higher on news that the pet food company is being sold to Swiss food giant
. Ralston-Purina was up a whopping 27.7%.
Nestle is paying $10.3 billion, or $33.50 a share, to buy the business, which will be called Nestle Purina Pet Care.
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Semiconductor stocks were getting creamed, with the
Philadelphia Stock Exchange Semiconductor Index
falling 4.8% to 638.7. The
Philadelphia Stock Exchange Computer Box Maker Sector
was also down, lower by 2% to 128.3.
Utilities were also off -- the usually safe defensive is being hit with concerns about California -- with the
Dow Jones Utilities Average
down 2.8% to 335.8; while the still-safe defensive
Dow Jones Transportation Average
was up 1.2%.
The day's winners were insurance and banking stocks, while additional defensives -- like paper and drugs -- were also higher. The
S&P Insurance Index
was up 2.9%; the
Philadelphia Stock Exchange Forest & Paper Products Index
was up 1.7%.
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Bond prices were bouncing back this morning after plunging Friday. Some hotter-than-expected data that morning tempered expectations that the Fed would cut interest rates a full 50 basis points when it meets at the end of this month. The benchmark 10-year
Treasury note was lately up 1/32 to 103 23/32, yielding 5.250%.
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