updated 7/16/2004 9:59:19 AM ET 2004-07-16T13:59:19

Uncertain investors sent blue-chip stocks lower Thursday, as the market’s uneasiness over terrorism and future earnings overshadowed an unexpected drop in wholesale prices and another series of upbeat profit reports.

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While second-quarter earnings in the financial and technology sectors came in above estimates, stocks moved in and out of negative territory for much of the day, partly because of options expirations on Friday. In addition, investors were increasingly concerned about third- and fourth-quarter profit outlooks, as well as a number of economic and political issues, analysts said.

“It’s extremely frustrating. Earnings are good, fundamentals are good, but all these other worries — terrorism, oil prices, interest rates, the election — are keeping people on the sidelines,” said Richard A. Dickson, senior market strategist at Lowry’s Research Reports. “I think the great earnings we have here were baked into the market last year. Now we’re waiting for some other reason to go up or down.”

At the close, the blue-chip Dow Jones industrial average was down 45.64 points, or 0.5 percent, while the broader Standard & Poor’s 500-stock index was down 4.78 points, or 0.4 percent. The Nasdaq composite index slipped 2.17 points, or 0.1 percent.

The producer price index dropped 0.3 percent in June, according to the Labor Department — a sign that inflation might not be as serious an issue as some had feared. Economists had expected a slight rise. And the Commerce Department said inventories rose 0.4 percent in May, while sales climbed 0.7 percent, signs that businesses are increasing their investments and that consumers are rewarding their efforts.

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Jobs, however, continue to be an area of concern. First-time jobless claims rose by 40,000 for the week to 349,000. The Labor Department blamed seasonal adjustments at the nation’s automakers for the increase.

With good and bad news in equal measure, most investors chose to wait out the session in advance of IBM Corp.’s earnings, which came out after the close. IBM, which beat estimates by 4 cents per share, was down 11 cents at $84.02 for the day, but rose 64 cents to $84.66 in after-hours trading.

“I think some people are looking to IBM, but there are plenty who are just waiting, period,” said Matt Kelmon, portfolio manager of the Kelmoore Strategy Funds. “Nobody’s worried that the market’s about to cave, but there’s no catalyst for the upside either.”

Despite a massive one-time charge to settle lawsuits over the WorldCom scandal, Citigroup managed to beat Wall Street estimates for the second quarter by 5 cents per share. And Wachovia exceeded expectations by 2 cents per share on record quarterly earnings. Citigroup was down 89 cents at $44.21, while Wachovia slipped 32 cents to $44.37.

The long-suffering technology sector received a boost from a pair of positive earnings reports.

Apple Computer Inc. surged $3.35 to $32.93 after beating Wall Street expectations by 2 cents per share, thanks to strong sales of its iPod music players and its laptop computers. And flash memory producer SanDisk Inc. surged past estimates by 8 cents per share on an 85 percent jump in revenue. SanDisk climbed $4.11 to $24.09.

Not all the technology earnings news was positive. Nokia Corp. skidded $1.79 to $12.45 after sales fell in the second quarter and the company warned that competition and dropping cell phone prices could affect Nokia’s future profitability.

In other earnings news, PepsiCo Inc. fell $1.49 to $51.92 after meeting analysts’ estimates but showing weakness in its Quaker brand products.

Advancing issues outnumbered decliners by about 5 to 4 on the New York Stock Exchange, where volume came to 1.4 billion shares, compared to 1.46 billion on Wednesday.

Overseas, Japan’s Nikkei stock average rose 0.5 percent. In Europe, Britain’s FTSE 100 closed down 0.7 percent, France’s CAC-40 fell 1.1 percent for the session, and Germany’s DAX index lost 1.3 percent.

© 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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