Updated from 4:09 p.m. ESTStocks meandered lower Monday, unmoved by a steadily climbing dollar that helped long-bond yields build on their rally of last week. Volume was reminiscent of last summer's doldrums as traders looked ahead to earnings reports later this week from Dell ( DELL) and Cisco ( CSCO). The Dow Jones Industrial Average fell 0.37 point to 10,715.76, while the S&P 500 lost 1.31 points, or 0.11%, to 1201.72. The Nasdaq Composite fell 4.63 points, or 0.22%, to 2082.03. The 10-year Treasury bond added 6/32 to yield 4.05%. The dollar traded near a one-month high against the yen and a three-month high against the euro, spurred by comments suggesting China doesn't consider its currency undervalued. The dollar got a boost on Friday when Fed Chairman Alan Greenspan played down the threat to the economy of the U.S. trade and budget deficits. Volume on the New York Stock Exchange was 1.35 billion shares, with advancers narrowly beating decliners by a ratio of 17-to-16. Volume on the Nasdaq was 1.69 billion shares, with decliners outpacing advancers 16-to-15. Oil fell amid a growing market consensus that OPEC will wait for lower prices before enacting production cuts. The March crude futures contract closed down $1.20 to $45.28 a barrel in Nymex floor trading. The decline forced the Philadelphia Oil Service Sector index down 1.8%. "We've worked off the oversold situation that we've had this year," said John Hughes, equity strategist with Shields & Co. "Now we're getting back towards overbought, which would give us what we're seeing today. A pullback in oil has hurt the energy stocks, which had a great run over the last couple weeks." Wal-Mart ( WMT - Get Report) said sales at stores open more than a year will probably rise 2% to 4% from a year ago in February, matching its previous guidance. In a switch, Wal-Mart said general merchandise sold better than food last week, while the Northeast was the strongest region. Wal-Mart added 5 cents, or 0.1%, to $53.51.
Bullish research on Google ( GOOG - Get Report) failed to lift the stock Monday. SG Cowen said it is increasingly optimistic about the Internet search engine, citing expectations for faster growth and a sustained market position. The brokerage expects Google to outperform the market by 35% over the next 12 months. Shares of Google dropped $8.33, or 4.1%, to $196.03. Another Internet darling, Chinese portal Sohu.com ( SOHU - Get Report), was under pressure after reporting an in-line fourth quarter but saying first-quarter earnings could trail estimates. Sohu earned 17 cents a share in the December period, matching estimates on a 2.1% rise in sales to $24.1 million. For the first quarter, the company expects to earn 14 cents to 16 cents a share, below the consensus estimate of 18 cents a share. Sohu.com tumbled $1.96, or 11.4%, to $15.26. The drop in Sohu.com spilled over into other Chinese Internet stocks such as Sina ( SINA), NetEase ( NTES - Get Report) and China.com Sina was off 5 cents, or 0.2%, to $27.35; NetEase was down $1.82, or 4.2%, to $41.67; and China.com lost 10 cents, or 2.8%, to $3.50. Humana ( HUM - Get Report) reported fourth-quarter earnings of $47.13 million, or 29 cents a share, a 29% drop from $66.31 million, or 41 cents a share, a year ago. The company posted revenue of $3.21 billion, up from $3.15 billion. The Thomson First Call consensus called for earnings of 27 cents a share on revenue of $3.2 billion. The company also raised its 2005 earnings forecast to $2.05 a share from $1.95 a share. Humana closed lower by 50 cents, or 1.4%, to $34.15. WellPoint ( WLP) had fourth-quarter earnings of $184.5 million, or 92 cents a share, down from $208.8 million, or $1.47 a share, a year ago. Excluding items, the company earned $1.69 a share, up from $1.43 a share last year. Revenue was $6.72 billion, a 59% increase year over year. The Thomson First Call consensus called for earnings of $1.68 a share on revenue of $6.83 billion in the most recent quarter. For the first quarter of 2005, WellPoint expects earnings of $1.82 a share, in line with the consensus. However, shares were off $4.04, or 3.2%, to $120.85.
Pfizer ( PFE) saw its shares rise after the company told The New York Times that it still believes clinical data show its Celebrex and Bextra drugs are safe. Pfizer gained 68 cents, or 2.8%, to $24.91. In brokerage action, Smith Barney raised its January same-store sales forecast for McDonald's ( MCD) to growth of 6.6% from a drop of 1.5% for the month. Citing results of a recent survey of franchisees, the brokerage also reiterated its buy rating but raised the stock-price target to $37 from $36 and its 2005 earnings estimate to $2.06 a share from $2.02. Shares added 21 cents, or 0.6%, to $32.78. Prudential reiterated its overweight rating for Altria ( MO) and raised its price target to $70 from $68. The broker cited the federal appeals court decision on Friday that the government could not take past earnings as part of its $280 billion racketeering case against tobacco companies. Altria fell 45 cents, or 0.7%, to $66.55 after having added 5.1% on Friday. A.G. Edwards upgraded shares of Kohl's ( KSS) to buy from hold, citing favorable valuation of the stock price. Kohl's gained 68 cents, or 1.4%, to $47.73. In economic news, the Federal Reserve said U.S. consumer credit rose by $3.1 billion, or 1.8% in December. It had been expected that consumer credit would increase by $7.9 billion for the month. However, consumer credit rose by a revised $2 billion in November, higher than the Fed's earlier estimate that credit had fallen by $8.7 billion. For all of 2004, consumer credit rose by 4.6%. Cisco ( CSCO) will announce quarterly earnings after the bell Tuesday. The Thomson First Call consensus projects earnings of 22 cents a share. Cisco rose 26 cents, or 1.4%, to $18.16. "Cisco comes out after the close tomorrow, so there's some anticipation there," Hughes added. "Monday typically has lighter volume to begin with, so if you add that anticipation, it compounds it. I think it's important with what Cisco does that's making everyone tentative. It could be the last big number people have been waiting for." Overseas markets ended higher, with London's FTSE 100 gaining 0.8% to 4979 and Germany's Xetra DAX adding 0.6% to 4366. In Asia, Japan's Nikkei rose 1.2% overnight to 11,500, while Hong Kong's Hang Seng added 1.5% to 13,795.