Stocks dipped lower yesterday despite a sharp drop in oil prices and new strength in the dollar as investors worried about the market's...
NEW YORK — Stocks dipped lower yesterday despite a sharp drop in oil prices and new strength in the dollar as investors worried about the market’s ability to hold its gains after last week’s rally.
The Dow Jones industrial average fell 0.37, essentially unchanged, to 10,715.76 after a 123-point gain Friday.
Microsoft, one of the 30 Dow stocks, slipped 16 cents to close at $26.16 a share. Boeing, also a Dow stock, was off 8 cents to $52.50.
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Broader stock indicators also lost ground. The Standard & Poor’s 500 index was down 1.31 at 1,201.72, and the Nasdaq composite index lost 4.63 to 2,082.03.
Investors hoped the new week would extend an advance forged on mostly positive fourth-quarter earnings reports and reassuring economic data.
Instead, yesterday’s light trading meant that many players kept to the sidelines, unsure whether the rally had staying power, particularly in light of the market’s poor performance in January.
“The question now is whether last week was just a technical bounce, or if there’s something here that we can trade on to the upside,” said Chris Johnson, manager of quantitative analysis at Schaeffer’s Investment Research in Cincinnati.
“So today, you have people waiting to see whether these gains stick.”
There was no catalyst to keep buyers in the market yesterday. President Bush released his $2.57 trillion budget proposal that calls for slashing spending across a wide swath of government programs but also included a record deficit.
The budget is “a positive sign, certainly, and you’re seeing the dollar rise because of that,” said Peter Cardillo, chief strategist and senior vice president at S.W. Bach. “The question is, is it going to be torn apart by Congress? That’s a big battle on the horizon.”
Even a new three-week high for the dollar and a sharp drop in crude-oil futures failed to move stocks. A barrel of light crude closed at $45.28, down $1.20, on the New York Mercantile Exchange.
Last week’s substantial move higher was broad-based, with only technology shares lagging because of concerns about weak corporate capital spending. Investors were cheered by reports that pointed to economic growth healthy enough to sustain stock prices but slow enough to avoid inflation issues.
The dearth of news yesterday led to very little movement in the indexes. They blipped higher after Bush released the budget, then settled back down again for most of the session.
A move downward in afternoon trading, mirroring a late-day trend seen in much of January, also failed to sustain itself.
Wellpoint slid $4.04 to $120.85 after it reported a 12 percent drop in profits, due in part to last year’s merger with Anthem. The health insurer’s profits were a penny per share better than Wall Street expected.
Health-benefits provider Humana saw its profits drop 29 percent because of a shift in accounting for a new contract. The company nonetheless beat analysts’ forecasts by 2 cents per share.
Humana dropped 50 cents to $34.15.
Toy manufacturer Hasbro lost 40 cents to $20 after missing Wall Street profit expectations by 5 cents per share.
The company blamed weak U.S. toy sales for a lackluster quarter.
Aircraft parts manufacturer Goodrich said strong sales to Europe’s Airbus consortium and to Boeing led to a sharp rise in profits for the quarter. The company beat expectations by 17 cents per share before one-time charges. Goodrich was up 93 cents at $35.43.