Wall Street started the week with a mixed performance Monday, as investors regained a cautious stance in response to a weaker-than-expected profit report from Bank of America Corp., disappointing news from the Midwest bank National City Corp., and another record-breaking tear in oil prices.
Investors were clearly uneasy about extending last week’s big gains after Bank of America reported that its first-quarter earnings fell 77 percent on write-downs and widening credit losses. BofA’s news followed a week in which big-name companies in general turned in better-than-expected numbers for the first quarter, helping the major stock indexes to gains of more than 4 percent.
Wall Street has at times worried that a slowing economy and a potentially hesitant consumer would crimp profits — especially for the financial sector — in the first three months of the year. Shares of National City dropped after the Midwest bank said it got a $7 billion cash infusion from equity investors, lowered its dividend and posted a $171 million loss for the first quarter.
Not all the earnings news Monday was disappointing. Merck said its profit nearly doubled in the first quarter because of a $1.4 billion distribution from a partner drug company and a slight rise in sales. Both Bank of America and Merck are among the 30 stocks that comprise the Dow Jones industrial average.
With little in the way of economic data scheduled to arrive this week, investors are looking at a big flow of corporate reports for insights into the well-being of the economy. At this point, investors remain cautious, but because they have already taken huge amounts of money out of stocks, the market appears stuck in a range — fluctuating back and forth as traders recoil at disappointing news but then take advantage of bargain prices.
“The percentage of cash on the sidelines as a percentage of market value is the highest it’s ever been,” said Richard E. Cripps, chief market strategist for Stifel Nicolaus. “We have an acute level of risk aversion by investors — understandably so.”
According to preliminary calculations, the Dow fell 24.34, or 0.19 percent, to 12,825.02.
Broader stock indicators were mixed. The Standard & Poor’s 500 index fell 2.16, or 0.16 percent, to 1,388.17, while the Nasdaq composite index rose 5.07, or 0.21 percent, to 2,408.04.
The technology-dominated Nasdaq got a boost from Apple Inc., which rose $7.12, or 4.4 percent, to $168.16 after an RBC Capital Markets analyst lifted his price target for the stock and predicted the company’s fiscal second-quarter results will surpass expectations.
Rising oil prices, meanwhile, weighed on some stocks, including airlines, but boosted energy companies including Exxon Mobil Corp., which rose 26 cents to $94.26. Crude rose 79 cents to close at a record $117.48 a barrel, on supply worries and speculative buying. Gold also rose, while the dollar was mixed against other major currencies.
On the New York Stock Exchange, declining issues outnumbered advancers by about 9 to 7 and volume came to 1.12 billion shares.
Bond prices dipped. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.71 percent from 3.70 percent late Friday.
“We kind of have a mixed bag,” said Anthony Conroy, managing director and head trader for BNY ConvergEx Group, referring to Monday’s news. He said, though, that market watchers should not read too much into Wall Street’s fluctuations, given how low trading volumes were during Monday’s session.
Bank of America said its profit totaled $1.21 billion, or 23 cents per share. Analysts had been expecting the company, which recently acquired mortgage lender Countrywide Financial, to report earnings of 41 cents per share, according to Thomson Financial. The stock fell 95 cents, or 2.5 percent, to $37.61.
National City shares tumbled $2.30, or nearly 28 percent, to $6.03.
Merck fell 13 cents to $39.63 after reporting its quarterly results, while Eli Lilly and Co. fell $2.48, or 4.8 percent, to $49.59 after reporting that strong sales for Cymbalta and Cialis helped double the drug maker’s first-quarter earnings but could not lift them up to Wall Street’s expectations.
Mattel Inc. said higher product costs and legal fees led the company to post a loss for the first quarter. The world’s largest toymaker, which makes Barbie dolls, Fisher-Price toys and Matchbox cars, said it saw a loss of $46.6 million compared with earnings of $12 million a year earlier. The results fell short of what Wall Street had been expecting and the stock fell $1.78, or 8.2 percent, to $20.
The Russell 2000 index of smaller companies fell 3.07, or 0.43 percent, to 718.00.
Overseas, Japan’s Nikkei stock average slipped 0.13 percent. Britain’s FTSE 100 fell 0.06 percent, Germany’s DAX index declined 0.83 percent, and France’s CAC-40 fell 1.03 percent.