Investors braced for what will likely be a tough earnings season, sending stocks modestly lower Monday ahead of some key earnings reports.
After disappointing results from AMD, GE, Wachovia and Philips Electronics, expectations are low heading into earnings reports from technology and financial bellwethers like Intel, IBM, Citigroup, Merrill Lynch and JP Morgan, all of which will report this week.
Investors will also have to contend with wholesale and retail inflation data the next two days.
Intel fell 2.6% ahead of its results due out Tuesday night. Analysts are looking for earnings of 25 cents a share on an 8.8% increase in sales to $9.63 billion. Better than expected bottom-line results would go a long way toward easing margin fears at the chip giant.
AMD and SanDisk, both of which will also report results this week, also lost ground Monday, as investors shied away from chip stocks. EBay, which will report its results on Wednesday, gained 1.6%.
IBM — one of the few dependable market leaders in the current downturn — will report its results Wednesday night, and analysts are looking for earnings of $1.45 a share on a 7.3% increase in sales to $23.63 billion. IBM shares gained 1% on Monday.
Circuit City was the day’s biggest winner, soaring 27% on a takeover offer from Blockbuster.
Yahoo slipped 2%, as a UBS analyst cast doubt on the company’s efforts to resist Microsoft’s takeover attempt and remain independent.
The Nasdaq lost 14 to 2275, the S&P fell 4 to 1328, and the Dow shed 23 to 12,302. Volume declined to 3.54 billion shares on the NYSE, and 1.64 billion on the Nasdaq. Decliners led by a 19-13 margin on the NYSE, and 18-10 on the Nasdaq. Downside volume was 64% on the NYSE, and 68% on the Nasdaq. New highs-new lows were 48-93 on the NYSE, and 36-183 on the Nasdaq.