New York Report: Profit-taking sent stocks modestly lower in the United States yesterday after oil prices topped $55 a barrel and a disappointing earnings update from Texas Instruments cast fresh doubts on the tech sector.
In a session with little economic or earnings news, the sharp rise in oil prices dominated trading. Crude oil futures rose above $55 for the first time in more than four months before slipping lower at the end of trading. A barrel of light crude settled at $54.59, up 70 cents, on the New York Mercantile Exchange.
"Because of the lack of other news, oil becomes the big news," said Brian Bruce, director of global investments at PanAgora Asset Management in Boston. "In aggregate, there's generally been more good news than bad news. But with nothing else going on today, you're seeing oil put a damper on everybody's enthusiasm." The Dow Jones industrial average fell 24.24, or 0.2 per cent, to 10,912.62.
Broader stock indicators were moderately lower. The Standard & Poor's 500 index was down 5.88, or 0.5 per cent, at 1,219.43, and the Nasdaq composite index lost 16.66, or 0.8 per cent, to 2,073.55.
Tech stocks slipped after gaining ground in Monday's session, with semiconductor stocks leading the way after Texas Instruments cut its earnings forecasts. That led investors to worry about increasing inventories and lagging sales in much of the tech sector.
Bonds fell along with stocks, with the yield on the 10-year Treasury note rising to 4.38 per cent from 4.31 per cent late Monday. Gold prices moved higher, while the dollar dropped sharply against the euro and the Japanese yen "It's like the ghosts of Christmas past - oil and the dollar," said Bryan Piskorowski, market analyst at Wachovia Securities. "But given that we're fairly steady, just a little lower, that's a good thing. Given the market's recent gains, a little bit of paring shouldn't come as a complete surprise." Anticipation of Texas Instruments mid-quarter update fuelled buying on Monday, but the electronics manufacturer disappointed Wall Street by trimming the top end of its profit and revenue forecasts for the current quarter. Texas Instruments lost $1.03 to $26.34.
Qualcomm dropped $1.10 to $36.29 after the company announced that Paul Jacobs, son of chief executive officer Irwin Mark Jacobs, would succeed his father in the top post on July 1st. The elder Jacobs, who co-founded Qualcomm in 1968, will remain as chairman, the company said. - (AP)
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