Instead of opening higher and bouncing lower later, the markets stumbled right from the get-go on Tuesday but the end result was the same as last week. After Monday's modest gains -- despite another late-afternoon fade -- there were few signs of strength as the crumbling and bumbling market of 2005 ground lower again. The Dow Jones Industrial Average lost almost 65 points, or 0.6%, to 10,556.22. The day's low at 10,531.60 was lower than Monday's low, the eighth consecutive such drop. The S&P 500 also lost 0.6% to 1183.02. And the weak sister of 2005, the Nasdaq Composite, had another lousy day, falling 0.8% to 2079.62. The Comp's intraday low of 2072.62 was lower than the previous day, marking seven out of the past eight trading sessions with that warning sign. Breadth, which had been modestly positive on Monday, again turned decidedly negative as twice as many stocks fell as gained on both the Nasdaq and New York Stock Exchange. Aside from the technical weakness, disappointing earnings and/or guidance from Advanced Micro Devices ( AMD), Alcoa ( AA) and Genentech ( DNA) put investors in a sour mood on Tuesday. AMD, which said sales and operating income would be below forecasts for the fourth quarter, dropped through the floor, ending with a 26% loss. Alcoa, posting weaker earnings due to higher commodity costs and the falling dollar, fell 2.7%, and Genetech lost 7% after sales of its Avastin cancer drug were below expectations. After the close, chip bellwether Intel ( INTC) reported stronger-than-expected fourth-quarter earnings and -- more importantly -- gave bullish guidance. Down 1.5% in regular trading, Intel was recently up 2.6% in after-hours trading.
Parsing the Indicators
Whether Intel can reverse stocks' early 2005 funk remains to be seen. Regardless, the market's early-year weakness doesn't doom equities for the year, as past years have seen similar trends reverse. But how much solace to take from history, which doesn't repeat itself but does often rhyme, as Mark Twain used to say.