Stocks close lower
Trader Michael Zicchinolfi works Tuesday on the floor of the New York Stock Exchange where the Dow dropped 55.44 points. Alcoa reported its fourth-quarter results after the market closed, marking the unofficial kickoff of quarterly earnings announcements from U.S. companies.
U.S. stocks closed lower Tuesday as traders awaited the start of the corporate earnings season.
The Dow Jones industrial average dropped 55.44 points, or 0.4 percent, to 13,328.85. The Standard & Poor’s 500 index fell 4.74, or 0.3 percent, to 1,457.15. The Nasdaq composite index shed 7.01, or 0.2 percent, to 3,091.81.
Rising and falling stocks were split on the New York Stock Exchange. Consolidated volume was in line with the recent average, 3.6 billion shares.
Alcoa reported its fourthquarter financial results after the market closed, marking the unofficial kickoff to weeks of earnings announcements from U.S. companies. The aluminum maker said its revenue results exceeded the expectations of Wall Street analysts, while pershare earnings were roughly in line with expectations.
Alcoa is traditionally the first of the 30 companies in the Dow average to report earnings.
Market-watchers expect the quarter’s results could include many surprises because of events like Hurricane Sandy, the presidential election, and the narrowly avoided tax increases and spending cuts known collectively as the “fiscal cliff.”
“Earnings is going to be the big driver for the next couple of weeks, and we’re just sitting around waiting for it to begin,” said Kim Caughey Forrest, vice president and senior analyst at Fort Pitt Capital Group, an investment management firm.
The European debt crisis continued to cast a pall over the market. Unemployment in the 17 countries that use the euro hit a new high, leading the European Union to warn about the risk of fraying socialwelfare systems in southern Europe.
Trading has been cautious in the week since Congress and the White House struck a deal to maintain lower tax rates and postpone cuts in government spending. Enthusiasm about the compromise pushed the Dow up 300 points last Wednesday, its biggest gain since December 2011.
Shares of Agriculture products maker Monsanto rose $2.56, or 2.7 percent, to $98.50 after saying its profit nearly tripled in the first fiscal quarter, helped by strong seed sales in Latin America. Monsanto raised its earnings guidance for the year.
Video-game seller GameStop’s shares fell $1.56, or 6.3 percent, to $23.19 after reporting weak Christmas-season sales and cutting its revenue guidance.
Yum Brands, operator of the KFC and Taco Bell fast-food chains, plunged after saying a key sales metric in China fell more than expected in the fourth quarter. The decline was related to problems at two of its small chicken suppliers; nearly half of the company’s revenue came from China in 2011. Yum shares fell $2.85, or 4.2 percent, to $65.04.
In Korea, electronics giant Samsung said it expects record earnings for the fourth quarter as shoppers continue to embrace its smart phones and tablets. But there were signs its momentum is slowing, and the company’s stock closed down 1.3 percent in Seoul.