AP News, February 6th, 2007
Wall Street fell for a second straight session Tuesday as National Semiconductor Corp. issued a profit warning that sent technology stocks tumbling, and investors awaited results from networker Cisco Systems Inc.
National Semi, which makes chips used in mobile telephones, said late Monday it expects sales to post a steeper drop than previously expected. This triggered a sell-off among chip makers, including Texas Instruments Inc., Intel Corp., and Advanced Micro Devices Inc.
Investors also awaited results from Cisco Systems, often considered a bellwether for the technology sector, after the market closes. The report marks one of the last closely-watched companies to issue results as fourth-quarter earnings season winds down.
Investors also were somewhat hesitant to buy into the market ahead of speeches from Federal Reserve Chairman Ben Bernanke, as well as regional Fed presidents Michael Moskow and Janet Yellen. Central bankers left rates unchanged last week, and the market is now trying to gauge what the Fed's next move might be.
"The market is not expensive, it's not dirt cheap, and the catalyst over the past few weeks has been earnings," said Matt Kelmon, portfolio manager of the Kelmoore Strategy Funds. "Everything is really on hold until the market finds something else to talk about, but there's still no huge sign of an imminent pullback."
In early afternoon trading, the Dow fell 15.86, or 0.13 percent, to 12,645.88.
Broader stock indicators also were lower. The Standard & Poor's 500 index fell 1.93, or 0.13 percent, to 1,445.06, and the Nasdaq composite index fell 10.55, or 0.43 percent, to 2,460.05.
Treasury yields drifted lower as bond investors braced for policy speeches, and took positions ahead of forthcoming quarterly auctions. The bond market was unmoved by a speech from Treasury Secretary Henry Paulson, who said the White House's budget plan will keep the economy strong without raising taxes.
The yield on the benchmark 10-year Treasury note fell to 4.78 percent from 4.81 percent late Monday. The dollar was lower against other major currencies, while gold prices advanced.
Oil prices continued to climb on concerns that a blast of arctic weather in the Midwest and Northeast might linger, and drive up demand for heating fuel. A barrel of light sweet crude rose 11 cents to $58.86 on the New York Mercantile Exchange.
A jump in demand could lead to higher energy costs, but also greater profits for energy producers. However, any benefit to big oil companies was offset by disappointing results from BP PLC.
Britain's biggest refiner fell 61 cents to $63.18 after reporting fourth-quarter profit slipped 22 percent, and slashed its growth targets for this year. Anadarko Petroleum Corp. shares fell 84 cents, or 2 percent, to $42.11 after it said fourth-quarter profit doubled due to a one-time gain on the sale of a Canadian unit.
Exxon Mobil Corp., a component of the Dow Jones industrials, fell 55 cents to $75.12, while Chevron Corp. shed 60 cents to $73.18.
Technology stocks were among the market's biggest decliners, led by the semiconductor sector. National Semi fell 99 cents, or 4.3 percent, to $22.33 after it predicted lower-than-expected sales in the third quarter because of lower shipments to the Asia Pacific region.
Intel, the world's biggest maker of chips for computers, dropped 6 cents to $21.22; while rival AMD declined 43 cents, or 2.8 percent, to $15.17. Texas Instruments fell 55 cents to $31.04.
In other corporate news, Avon Products Inc. rose $3.35, or 9.7 percent, to $37.97 after the maker of beauty products said its fourth-quarter profit edged up from a year ago as the company struggled with restructuring costs.
McClatchy Co., the nation's second-largest newspaper publisher, rose 47 cents to $39.23 after the company's operating earnings surpassed Wall Street projections.
Las Vegas Sands Corp. fell $4.47, or 4.3 percent to $99.62 after the casino company reported fourth-quarter profit was boosted by an unexpected $30 million gain from its high-rollers table.
Declining issues outnumbered advancers by about 3 to 2 on the New York Stock Exchange, where volume came to 831.7 million shares.
The Russell 2000 index of smaller companies edged up 0.42, or 0.05 percent, 807.11. The index surpassed 800 for the first time last week, and reached an all-time high of 810.49 in the previous session.
Overseas, Japan's Nikkei stock average closed up 0.36 percent. At the close, Britain's FTSE 100 was up 0.45 percent, Germany's DAX index added 0.02 percent, and France's CAC-40 fell 0.08 percent.
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