Friday, August 1, 2008

U.S. stocks mostly lower on economic worries

U.S. stocks mostly lower on economic worries
3:43 p.m. 07/31/2008 By Nick Godt Provided by
Motorola swings to profit, boosts tech shares
NEW YORK (MarketWatch) -- U.S. stocks were mostly lower Thursday, and the market was on track for a mixed performance in the month of July, as economic concerns resurfaced after data showed weaker growth than expected in the second quarter and a big jump in jobless claims.
"The data were a little disturbing, especially jobless claims that near critical level," said Paul Mendelsohn, chief investment strategist at Windham Financial Services. "The GDP also came up short of expectations, and the general feeling is that now the [tax] stimulus is gone, what comes next?"
The Dow Jones Industrial Average (INDU) was down 113 points, or 1%, at 11,473, with 21 of its 30 components retreating.
The blue-chip average had rallied nearly 450 points over the past two sessions and was still on track to post a 1% gain for the month of July.
"We moved up over 400 points over the past few days," Mendelsohn said. "Taking a little breather now makes some sense."
Among blue chips, shares of Dow component Exxon Mobil Corp. (XOM) fell 3.3% after the oil giant's earnings surged 14% but still missed analysts' expectations. Away from the Dow, Royal Dutch Shell (RDSA) fell, after also missing estimates.
The energy sector was under heavy selling pressure as crude futures slumped 2.1% to end at $124.08 a barrel after surging on Wednesday.
The S&P 500 Index (SPX) was down 10.5 points, or 0.8%, to 1,273, led lower by a 3% drop in the energy sector. While consumer-discretionary stocks got a reprieve from falling oil, the financial sector also gave back some of its strong gains from Wednesday.
The S&P was down 0.5% for the month of July.
Shares of Walt Disney Co. (DIS), another blue-chip stock, slumped 4% even after the company reported a larger fiscal third-quarter profit than expected.
General Motors Corp. (GM) fell 3% after Standard & Poor's cut its ratings on the automaker, along with those of Ford Motor Co. (F) and those of Chrysler LLC.
The Nasdaq Composite Index (COMP) remained higher, gaining 4 points, or 0.2%, to end at 2,334. The technology-heavy index has still gained 1.8% in July.
Tech shares received a boost from Motorola Inc. (MOT), whose shares jumped 12% after the mobile-device maker said that it swung to a second-quarter gain of $4 million, or break-even per share, from a loss of $28 million or a penny a share in the year-ago period. Wall Street analysts forecast a loss of 4 cents a share on revenue of $7.7 billion, according to a survey by FactSet Research.
Economy
The Commerce Department said that growth rose 1.9% in the second quarter, lower than the 2.3% expected from economists surveyed by MarketWatch. Growth figures for the first quarter and fourth quarter of 2007 also were revised lower.
Separately, the Labor Department said that initial claims for unemployment benefits jumped up 44,000 to 448,000 in the week ended July 26.
Elsewhere, ImClone Systems Inc. (IMCL) surged after Bristol-Myers Squibb Co. (BMY) offered $60 a share, or $4.5 billion for its partner on the Erbitux drug.
Shares of MasterCard Inc. (MA) gained after news late Wednesday that the company will be added to the S&P 500 Index on July 1 and after reporting a better-than-forecast rise in adjusted profit.
Starbucks Corp. (SBUX) rose after the coffee retailer offered a positive outlook late Wednesday on its restructuring.
Shares of Akamai Technologies (AKAM) were off 20% after the Web-software firm met earnings expectations but saw revenues disappoint.
U.S. stocks closed sharply higher on Wednesday, continuing a rally from the previous session after a stronger-than-expected private-sector jobs report helped offset a rebound in oil prices. The Dow industrials rose 186 points, the S&P 500 rose 21 points and the Nasdaq added 10 points.

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