US blue chips dragged lower
Reuters | April 18, 2005
By Michael Flaherty
NEW YORK, April 18 (Reuters) - Blue chips fell on Monday, dragged lower by bellwether 3M Co.(MMM.N: Quote ,Profile ,Research ) , which reported lower-than-expected global sales, but shares of Bank of America (BAC.N: Quote ,Profile ,Research ) rose on strong earnings, lifting the Standard & Poor's 500 index.
The technology-dominated Nasdaq index rose, led by semiconductor shares, including Intel Corp. (INTC.O: Quote ,Profile ,Research ) , which was set to release a new chip for broadband wireless.
3M, the maker of Scotch tape and Post-It notes, posted a higher quarterly profit and affirmed its full-year outlook, but weak revenues sent shares of the Dow component and benchmark for the U.S. economy down 5.6 percent to $76.35. 3M accounted for nearly 80 percent of the Dow's drop on Monday.
Bank of America, the No. 3 U.S. bank, topped Wall Street expectations, sending its shares up 1.1 percent to $44.79. [nN18641993].
The Dow Jones industrial average was down 22.02 points, or 0.22 percent, at 10,065.49. The Standard & Poor's 500 Index was up 2.68 points, or 0.23 percent, at 1,145.30. The technology-laced Nasdaq Composite Index was up 8.07 points, or 0.42 percent, at 1,916.22.
Stocks tumbled to 5 1/2-month lows on Friday on heightened concerns about an economic slowdown and weak earnings.
"In general, the Dow is just being weighed down by 3M," said Edward Hemmelgarn, chief investment officer of Shaker Investments. "The market is so oversold, you were bound to get some sort of buy in. The question is how long will this last."
Corning Inc. (GLW.N: Quote ,Profile ,Research ) , the leading supplier of LCD glass, said it expects quarterly results to exceed its prior forecast, sending its shares up 5.7 percent to $11.73.
In other earnings news, SunTrust Banks Inc. (STI.N: Quote ,Profile ,Research ) , the No. 7 U.S. bank, said first-quarter profit rose 36 percent, helped by consumer banking and its acquisition of National Commerce Financial Corp. [nN18640977]
SunTrust shares rose 1 percent to $70.90. J.P. Morgan Chase & Co. (JPM.N: Quote ,Profile ,Research ) rose 2 percent to $34.60 after being upgraded by Banc of America Securities. The S&P banking index was nearly 1 percent higher on Monday.
In merger action, computer document company Adobe Systems Inc. (ADBE.O: Quote ,Profile ,Research ) said it agreed to buy multimedia software firm Macromedia Inc. (MACR.O: Quote ,Profile ,Research ) for about $3.4 billion in stock [nL18459625]. Macromedia rose 8 percent to $36.15, while Adobe slid 11.6 percent to $53.60.
Chip shares led the Nasdaq higher, with Intel up 1.3 percent to $22.36.
After Monday's closing bell, Texas Instruments Inc. (TXN.N: Quote ,Profile ,Research ) , the world's largest maker of chips for cellular phones, is scheduled to report first-quarter results.
U.S. crude oil prices fell to an eight-week low under $50 a barrel overnight, but later they rose on the New York Mercantile Exchange, with light crude (CLc1: Quote ,Profile ,Research ) up 11 cents to $50.60 a barrel.