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Wednesday July 14, 02:38
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US stock market closed mixed yesterday
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Corporate America gave Wall Street a better sense of the health of second-quarter earnings on Tuesday but investors opted to wait for Intel’s earnings, due after the close, before committing to buy more stocks.
The technology sector has dominated the markets’ attention as a flood of profits and revenues warnings from software and other tech companies raised concerns about the revival of business spending.
The Dow Jones Industrial Average and the S&P 500 each closed up 0.1 per cent, to 10,247.59 and 1,115.14, respectively. The Nasdaq slipped 0.3 per cent to 1,931.66.
Merrill Lynch shares shed 3.2 per cent to $49.80 after it unveiled a 10 per cent jump in profits but missed Wall Street’s expectations. The gains came on growth in the private client and investment management business and helped offset weakness in the investment banking and global markets.
Elsewhere in bank earnings, Boston-based State Street swung to a profit thanks to rising fees. However, shares fell 9.2 per cent to $44.95 after the company’s chief executive warned that rising interest rates could put pressure on revenues. Prudential cut its rating on the stock to "underweight" from "neutral". BB&T, the regional bank, edged down 0.3 per cent to $37.26 in spite of posting higher earnings, which beat Wall Street’s expectations.
Johnson and Johnson rose 0.9 per cent to $55.38 as the pharmaceuticals and household goods company more than doubled profits in the second quarter on rising sales, and beat Wall Street’s expectations to boot.
Intel shares were down 0.4 per cent to $26.14. The world’s biggest maker of semiconductors fell 1.2 per cent on Monday after Merrill Lynch downgraded the global semiconductor sector on worries about inventory build ups and overcapacity.
Investors shaken by Merrill’s bearish call embraced positive earnings results from Philips Electronics. Shares in the Dutch company rose 0.8 per cent to $26.26 as investors applauded robust earnings growth and a strong recovery in semiconductor sales.
Airlines were also in focus after Delta Air Lines said it would take $1.65bn in charges in the second quarter. Shares fell 9.8 per cent to $6.09. AMR Corp, parent o f American Airlines, dropped 4.1 per cent to $9.93 after Smith Barney downgraded the stock to "hold" from "buy".
Nortel Networks jumped 12.5 per cent to $4.76 as investors looked on the bright side of a mixed message. The telecom equipment maker admitted it still needed to improve its cost structure but said it continued to expect revenues to grow faster than the market in 2004.
Red Hat, the distributor of the Linux computer operating system, slumped 22.7 per cent to $15.73 after announcing it would restate results for three years to change the way it recognises subscription revenues.
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