Stocks slid early Thursday as Middle Eastern tensions pushed oil to an all-time high. Index futures recently showed the S&P 500 trading 2 points below fair value, while the Nasdaq 100 was set for a 6-point decline. The 10-year Treasury bond was up 2/32 in price to yield 5.09%, while the dollar fell against the yen and euro. A downgrade of Wal-Mart ( WMT) at Merrill Lynch reportedly was weighing on the indices. Oil rose as Israel bombed Beirut's airport and explosions closed two pipelines in Nigeria. After rising to a new high of $75.88 overnight, August crude was recently up 82 cents at $75.77 a barrel in electronic Nymex trading. Overseas markets were broadly lower. In Europe, London's FTSE 100 was recently down 1.1% to 5798, while Germany's Xetra DAX fell 1.5% to 5556. In Asia, Japan's Nikkei fell 1% to 15,098, while Hong Kong's Hang Seng lost 1.3% to 16,305. On Wednesday, weakness in semiconductor shares whacked the Nasdaq and dragged down the broader market. For the session, the Dow Jones Industrial Average lost 1.1% to 11,013, while the S&P 500 fell 1.1% to 1259 and the Nasdaq slid 1.8% to 2090. The second-quarter earnings season picked up steam Thursday morning. PepsiCo's ( PEP) profit rose 14% from a year ago to $1.36 billion, or 80 cents a share, beating estimates by 3 cents, while Marriott's ( MAR) net jumped 35% to $186 million, or 43 cents a share, beating estimates by 2 cents. Tribune ( TRB) said quarterly earnings fell to $85.7 million, or 28 cents a share, from $231.3 million, or 73 cents a share, last year. Adjusted earnings of 53 cents a share were 2 cents shy of estimates. Renault-Nissan CEO Carlos Ghosn told a French newspaper that an alliance with General Motors ( GM) could be an "enormous opportunity," depending on the circumstances. Ghosn is scheduled to meet with GM CEO Rick Wagoner in Detroit on Friday.
An initial public offering by Cowen & Co. ( COWN) priced below the expected range late Wednesday. The Societe Generale unit priced 11.2 million shares at $16 apiece; it had hoped for $19 to $21 a share.