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Telecoms lead stocks lower; Europe falls
Source: Agencies |
January 11, 2011, Tuesday
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STOCKS indexes were mostly lower yesterday, with telecommunication companies leading the way down.
AT&T Inc. fell the most out of the 30 stocks that make up the Dow Jones industrial average. Its competitor, Verizon Wireless, is expected to announce Tuesday that it will start selling Apple Inc.'s iPhone, breaking AT&T's long hold on iPhone customers.
AT&T's stock dropped 1.8 percent to US$28.34. Apple gained 1.9 percent to US$342.45.
Stocks spent most of the day lower ahead of the latest round of corporate earnings reports. After the market closed, Alcoa Inc. reported that rising sales of aluminum products helped it turn a profit of 24 cents a share in its fourth quarter. The results topped analysts' estimates of 18 cents a share.
The week started with news of two big corporate deals. DuPont, a major chemical company, said it would buy a Danish food maker for US$5.8 billion. Duke Energy Corp. said it will buy Progress Energy Inc. in a US$13 billion deal that would create one of the country's largest utilities. Duke fell 1.2 percent to US$17.58.
The Dow fell for the third day straight, losing 37.31 points, or 0.3 percent, to close at 11,637.45.
The Standard & Poor's 500 lost 1.75, or 0.1 percent, to 1,269.75. The Nasdaq composite gained 4.63, or 0.2 percent, to 2,707.80.
Losses were spread across the market. Five of the 10 industry groups that make up the S&P 500 index fell. Telecommunications companies fell the most, 1 percent, followed by utilities and energy. 3M Co. led the 30 stocks that make up the Dow with a 1 percent gain.
The Nasdaq index posted small gains thanks in part to Apple and Netflix Inc., which jumped 4.8 percent. Playboy Enterprises Inc. soared 17 percent after agreeing to be taken private by a group of investors led by the company's founder, Hugh Hefner.
European stocks fell after a German magazine reported that France and Germany are pressing Portugal to accept outside aid to keep Europe's financial crisis from spreading. Portugal has denied that it needs to do so. If the country asks for help it will join Greece and Ireland as the third member of the European Union to tap its neighbors for a bailout.
Italy, Spain and Portugal are each scheduled to sell bonds this week. If the sales go poorly it could further weaken confidence in Europe's financial system.
"Italy and Spain are the big wildcards," said Paul Zemsky, the head of asset allocation at ING Investment Management. "If they got into trouble there's not enough money to bail them out."
No major economic reports came out yesterday. On Friday, the Labor Department said that employers added fewer jobs in December than analysts expected. That report helped push the S&P down 0.2 percent.
Oil companies fell after a pipeline in Alaska was shut down because of a leak. Exxon Mobil Corp. fell 0.6 percent and Chevron Corp. gave up 1 percent.
Bond prices rose slightly, pushing their yields slightly lower. The yield on the 10-year Treasury note fell to 3.29 percent from 3.33 percent late Friday. The yield is used to set interest rates on many kinds of loans including mortgages.
Rising shares outnumbered falling shares by a slight margin on the New York Stock Exchange. Consolidated volume was 4.1 billion shares.
AT&T Inc. fell the most out of the 30 stocks that make up the Dow Jones industrial average. Its competitor, Verizon Wireless, is expected to announce Tuesday that it will start selling Apple Inc.'s iPhone, breaking AT&T's long hold on iPhone customers.
AT&T's stock dropped 1.8 percent to US$28.34. Apple gained 1.9 percent to US$342.45.
Stocks spent most of the day lower ahead of the latest round of corporate earnings reports. After the market closed, Alcoa Inc. reported that rising sales of aluminum products helped it turn a profit of 24 cents a share in its fourth quarter. The results topped analysts' estimates of 18 cents a share.
The week started with news of two big corporate deals. DuPont, a major chemical company, said it would buy a Danish food maker for US$5.8 billion. Duke Energy Corp. said it will buy Progress Energy Inc. in a US$13 billion deal that would create one of the country's largest utilities. Duke fell 1.2 percent to US$17.58.
The Dow fell for the third day straight, losing 37.31 points, or 0.3 percent, to close at 11,637.45.
The Standard & Poor's 500 lost 1.75, or 0.1 percent, to 1,269.75. The Nasdaq composite gained 4.63, or 0.2 percent, to 2,707.80.
Losses were spread across the market. Five of the 10 industry groups that make up the S&P 500 index fell. Telecommunications companies fell the most, 1 percent, followed by utilities and energy. 3M Co. led the 30 stocks that make up the Dow with a 1 percent gain.
The Nasdaq index posted small gains thanks in part to Apple and Netflix Inc., which jumped 4.8 percent. Playboy Enterprises Inc. soared 17 percent after agreeing to be taken private by a group of investors led by the company's founder, Hugh Hefner.
European stocks fell after a German magazine reported that France and Germany are pressing Portugal to accept outside aid to keep Europe's financial crisis from spreading. Portugal has denied that it needs to do so. If the country asks for help it will join Greece and Ireland as the third member of the European Union to tap its neighbors for a bailout.
Italy, Spain and Portugal are each scheduled to sell bonds this week. If the sales go poorly it could further weaken confidence in Europe's financial system.
"Italy and Spain are the big wildcards," said Paul Zemsky, the head of asset allocation at ING Investment Management. "If they got into trouble there's not enough money to bail them out."
No major economic reports came out yesterday. On Friday, the Labor Department said that employers added fewer jobs in December than analysts expected. That report helped push the S&P down 0.2 percent.
Oil companies fell after a pipeline in Alaska was shut down because of a leak. Exxon Mobil Corp. fell 0.6 percent and Chevron Corp. gave up 1 percent.
Bond prices rose slightly, pushing their yields slightly lower. The yield on the 10-year Treasury note fell to 3.29 percent from 3.33 percent late Friday. The yield is used to set interest rates on many kinds of loans including mortgages.
Rising shares outnumbered falling shares by a slight margin on the New York Stock Exchange. Consolidated volume was 4.1 billion shares.
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