Updated from 4:11 p.m. EDT
Stocks closed lower Monday as a two-month rally on the
began another weeklong test on the corporate earnings front.
Dow Jones Industrial Average
lost 54.70 points, or 0.51%, to 10,596.48. The S&P 500 was lower by 4.65 points, or 0.38%, at 1229.03, and the
fell 13 points, or 0.6%, to 2166.74. The 10-year Treasury was down 7/32 in price to yield 4.24%, while the dollar rose against the yen and fell against the euro.
"The market is awaiting more economic numbers this week," said Peter Cardillo, chief market analyst with S.W. Bach & Co. "Most of the earnings so far are good and I think the market is discounting that. If we don't get any more blockbuster news or earnings, the market will start to focus again on economic data. We need the catalyst of good economic numbers to spurn the market to new higher levels."
Trading volume on the
New York Stock Exchange
was 1.30 billion shares, and volume on the Nasdaq was 1.52 billion shares. Decliners outpaced advancers 5 to 3.
Paul Mendelsohn, chief investment strategist with Windham Financial, said various technical gauges suggest the major indices are overbought.
"This indicates that earnings and economic data will need to clearly and decisively push market indexes out of their trading range on these reports or risk losing the upward momentum as things begin to quiet down in August," Mendelsohn said.
Oil rose, with the September crude contract finishing up 37 cents to $59 a barrel, leaving it ahead of its week-ago level. Oil stocks were higher as well, with
adding 1.4%, and
On the economic front, the National Association of Realtors said existing-home sales in June rose 2.7% to a record high of 7.33 million, up from 7.14 million in May and well above the consensus 7.13 million.
"Sales cannot continue to rise at this pace; they probably cannot even remain at their current level for long," said Ian Shepherdson, chief economist with High Frequency Economics. "Sales follow mortgage applications, which have been very high and rising but are still not high enough to keep sales at this pace."
Stronger sectors Monday included energy, retail, materials, technology and airlines. Weaker areas included health care, biotech, homebuilding and computer hardware.
Stocks are coming off a volatile week in which the major indices turned in varied performances. The S&P 500 rose 5 points to 1233 over the five sessions, while the Nasdaq Composite added 22 points to 2179 and the Dow Jones Industrial Average rose 10 points to 10,651. The S&P 500 and Nasdaq sit near four-year highs.
About 40% of the S&P 500 companies have reported earnings already. This week's slate includes heavyweights such as
Exxon Mobil and
later in the week.
reports tonight and is expected to say that earnings rose 18% from a year ago to 29 cents a share.
Among companies reporting Monday,
said second-quarter earnings more than doubled to $408 million, or 40 cents a share, on a 2% rise in revenue to $3.92 billion. Excluding gains, the company missed estimates by 3 cents a share. Xerox also guided current-quarter earnings lower. Shares fell 85 cents, or 6.1%, to $13.20.
finished lower after the company reported second-quarter earnings of $1 billion, or 81 cents a share, a 16% gain from last year. Revenue climbed 11% to $8 billion. Analysts expected earnings of 78 cents a share and revenue of $7.78 billion, according to Thomson First Call. Shares were down 1 cent to close at $54.56.
said second-quarter earnings fell to $795 million, or 43 cents a share, from $996 million, or 54 cents a share, a year ago. The company blamed the decline on the purchase of AT&T Wireless by its Cingular Wireless joint venture. On a so-called adjusted basis, earnings beat the Thomson First Call consensus of 43 cents a share by 3 cents. BellSouth gained 9 cents, or 0.3%, to $26.81.
rose after the company acknowledged that a takeover offer from
represents more value than a competing bid from a private equity consortium. On Friday, Whirlpool raised its offer to $1.4 billion, or $18 per Maytag share. Maytag added 4.9% to $17, and Whirpool was higher by 7.1% to finish at $82.68.
said it will buy
for $7.4 billion. Teva shares rose 7 cents, or 0.2%, to $31.23, while Ivax surged $2.29, or 10%, to $25.17.
gained 2.7% after
said the company's shares could rise by 25% as it unveils new products. RBC Capital Markets reiterated its outperform rating for Motorola and raised its stock-price target to $24 from $20. Motorola was up 54 cents to close at $20.54.
were trading lower Monday after
The Wall Street Journal
reported private equity firms may be interested in bidding for the automaker's Hertz car rental company.
In brokerage action, Merrill Lynch raised its full-year earnings target for
to $5.90 a share from $5.83. The firm raised its 2006 estimate to $7.33 a share from $7.11. Still, Google slid $6.55, or 2.2%, to $295.85.
Merrill also lifted its stock price target for
Sirius Satellite Radio
to $9 from $7.50 and reiterated its buy rating. Sirius rose 7 cents, or 1%, to $7.
closed higher after brokerage Jefferies raised the stock-price target on both companies after better than expected earnings last week. The firm raised the price target for Halliburton to $70 from $54 and reiterated a buy rating on the stock. Jefferies raised the target for Schlumberger to $100 from $80 and also reiterated a buy rating.
Meanwhile, CSFB raised its price target for Halliburton to $65 from $51. Also, RBC Capital Markets raised Schlumberger's price target to $115 from $96, and CSFB raised the stock price target to $100 from $86. Halliburton gained $1.57, or 3%, to $54.86, while Schlumberger was up $2.60, or 3.2%, to finish at $84.88.
Overseas markets were higher, with London's FTSE 100 adding 0.5% to 5270 and Germany's Xetra DAX up 0.1% at 4842. In Asia, Japan's Nikkei added 0.6% overnight to 11,763, while Hong Kong's Hang Seng rose 0.1% to 14,794.
To view Aaron Task's video take on today's market, click here