(by G. Andersen)

US stocks fell to new 2004 lows, as investors again signalled that good earnings were not enough, and that they were sorely disappointed not to see rosier guidance for the second half of the year.

The Dow Jones industrial average was down 0.30 of a points, or unchanged on a percentage basis, at 9,961.92. The Standard & Poor’s 500 Index fell 2.13 points, or 0.20 percent, to 1,084.07, its lowest close since Dec. 17, 2003. The Nasdaq Composite Index fell 10.07 points, or 0.54 percent, to 1,839.02, its lowest close since Oct. 2, 2003.

Microsoft, helped cap losses in the market after Barron’s reported the stock is attractively valued as the company prepares for further revenue gains and faster-growing profits. Shares of Microsoft rose 63 cents, or 2 percent, to $28.66.

Schering-Plough and Merck were in focus after the Food and Drug Administration approved Vytorin, a cholesterol treatment the companies jointly produced. The companies are hoping it will be a billion-dollar blockbuster to rival Pfizer’s Lipitor, the world’s top-selling drug.

Schering-Plough gained 4.3 per cent to $19.56, but partner Merck slipped 0.4 per cent to $45. Traders noted Schering-Plough has been a worse performer than Merck this year. Pfizer shares fell 1.7 per cent to $31.74.

AT&T rose 5.1 per cent to $14.73 after Newsweek reported that the long-distance telephone company was working with private equity firm Kohlberg, Kravis, Roberts, and could receive a takeover bid.

Elsewhere in telecommunications sector, BellSouth added 3.5 per cent to $26.81 as the Baby Bell beat Wall Street’s earnings expectations by a penny.