Stocks Lower as Oil Remains Aloft
Stocks ticked lower early Wednesday as
Genentech's
( DNA) spiffy earnings growth wasn't enough to revive a market beaten down by high oil prices and geopolitical anxiety.
Index futures recently showed both the
S&P 500
and Nasdaq 100 trading a point below fair value. The 10-year Treasury bond was unchanged in price to yield 4.92%, while the dollar was steady against the yen and euro.
Wednesday's economic slate features a Commerce Department report that is expected to show the U.S. trade deficit narrowed slightly to $67.5 billion, according to a
Bloomberg
survey. At that width, the deficit would still be the third-largest of any month on record.
Genentech fell late Tuesday despite reporting a 48% jump in first-quarter earnings to $421 million, or 39 cents a share. Adjusted earnings of 46 cents a share were a nickel better than forecast. Revenue rose 36% to $1.99 billion and the biotech titan bumped up guidance for the full year.
Oil prices weren't moving much but still held near seven-month highs as traders digested Iran's claim to have successfully manufactured enriched uranium as part of a nuclear research program. May crude, which gained $1.35 on Monday and 24 cents Tuesday, was recently off 5 cents to $68.93 a barrel in electronic trading.
The situation in Iran beat down U.S. stocks Tuesday. The
Nasdaq Composite
led the way lower with a 1% swoon, while the
Dow Jones Industrial Average
fell 0.5% to 11,090 and the S&P 500 slipped 0.8% to 1287.
Companies reporting earnings Wednesday include
Circuit City
(CC) - Get Report
,
Commerce Bancorp
(CBH) - Get Report
and
Advanced Micro
(AMD) - Get Report
.
Overseas markets were lower, with London's FTSE 100 recently down 0.6% to 5983 and Germany's Xetra DAX losing 0.5% to 5879. In Asia, Japan's Nikkei fell 1.5% overnight to 17,163, while Hong Kong's Hang Seng lost 1% to 16,311.
European markets continued to buzz with news that the
Nasdaq
has accumulated a roughly 15% stake in the London Stock Exchange two weeks after dropping a buyout offer for the company. The Nasdaq labeled the purchase "strategic," but observers say it could fan more takeover speculation for the U.K. exchange.
To view David Peltier's video take on today's premarket action, click here
.
Also overseas,
(GOOG) - Get Report
CEO Eric Schmidt told
Reuters
Wednesday that he sees a huge potential for growth in China. Schmidt said the Internet company likely to add 100 software engineers in China this year.
Two mid-tier tech companies issued profit warnings Tuesday.
Avid
(AVID) - Get Report
said it sees adjusted earnings of 35 cents to 38 cents a share on sales of about $217 million in the first quarter. Analysts wanted 49 cents and $230.23 million.
And
Emulex
(ELX)
predicted third-quarter adjusted earnings of 20 cents or 21 cents a share on sales of $106 million to $108 million. Analysts were looking for 27 cents a share on sales of $107 million.
A story in the
Wall Street Journal
Wednesday says class-action lawyers could target another drug in possible lawsuits against
Merck
(MRK) - Get Report
. Lawyers reportedly have their sights set on Fosamax, an osteoporosis treatment that they claim is linked to a rare jaw disease. Merck says the causal chain is unclear and the disease is probably related to other conditions.
