Wall Street waited for the release of Intel Corp.’s earnings and waffled through an uninspired session Tuesday, leaving stocks narrowly mixed despite solid results from Johnson & Johnson and several banking companies.
After the close, chip-making giant Intel said its second-quarter earnings jumped 96 percent as the world’s largest semiconductor company reported stronger-than-expected demand for the flash memory chips used in cellular phones.
A disappointing report from Merrill Lynch and the wait for Intel kept the markets off balance during regular trading hours, with light volume and little change on the major indexes.
Investors had hoped Intel’s earnings would give a better read on the health of the technology sector, which had been hit hard over the past week with analyst downgrades and lowered outlooks. Despite the negativity, however, some analysts saw reasons for hope.
“I think some of the earnings expectations have been lowered over the past few weeks, and that’ll be built into prices,” said Doug Sandler, chief equity strategist at Wachovia Securities. “That does give us some room to the upside of this trading range we’re stuck in should earnings come in strong.”
At the close, the Dow Jones industrial average was up 9.37 points, or 0.1 percent, at 10,247.59, while the broader Standard & Poor’s 500-stock index rose 0.79 point, or 0.1 percent, to 1,115.14. The Nasdaq composite index fell 5.26 points, or 0.3 percent, to 1,931.66.
The Commerce Department’s latest report on the nation’s trade deficit gave the market a lift. The trade deficit narrowed to $46 billion in May, dropping 4.5 percent from April’s all-time high. U.S. exports had their best month on record, the department said, helped in part by a weaker dollar.
However, investor focus remained with earnings and, in particular, companies’ outlooks for the second half of the year, which call for slower growth rates. Add that to concerns over terrorism, election year politics and ever-present interest rate concerns, and investors “are going to be sitting on their hands,” said Hugh Johnson, chief investment officer at First Albany Corp.
“What we see right now is the market bumping up against a wall of worry,” Johnson said. “For every investor, there’s something to worry about. And that’s why, even though second quarter should come in strong, it won’t be enough to really spark anything.”
Johnson & Johnson saw its sales climb 11.1 percent from a year ago, crediting it pharmaceutical and medical devices for the rise. The company earned $2.5 billion in the quarter, beating Wall Street estimates by 3 cents per share. J&J climbed 49 cents to $55.38.
Merrill Lynch fell $1.67 to $49.80 after missing Wall Street expectations by 3 cents per share for the second quarter due to losses from investment banking and overseas businesses. The rest of the financial sector was mixed even as three banks all beat expectations for the quarter. BB&T Corp. was down 12 cents at $37.26, AmSouth Bancorp gained 12 cents to $24.91, and Commerce Banc fell 92 cents to $54.26.
Newspaper publisher Gannett Co. announced earnings that were in line with estimates, boosting profits by 9 percent from a year ago. But Media General Inc., which runs broadcast stations and major metropolitan newspapers, missed its estimates by 6 cents per share. Gannett climbed 99 cents to $82.38, while Media General lost 8 cents to $62.52.
In its first day on the New York Stock Exchange, Domino’s Pizza Inc. traded at $13.50, 50 cents below its offering price of $14 per share.
Advancing issues barely outnumbered decliners on the NYSE, where volume was light.
Overseas, Japan’s Nikkei stock average rose 0.2 percent. In Europe, Britain’s FTSE 100 closed down 0.1 percent, France’s CAC-40 rose 0.1 percent and Germany’s DAX index gained 0.3 percent.