February 23, 2024

Hewlett-Packard’s Results Help Drag Down the Dow

H.P. fell more than 7 percent. The company lowered its earnings outlook for the rest of the year, partly because of weaker sales of personal computers. The company’s shares fell to $36.91, near the lowest price in 12 months.

Concerns about the economy’s strength helped pull down industrial companies like Caterpillar and Boeing. The Federal Reserve said the nation’s factories produced fewer goods in April for the first time in 10 months. If the decline continues, it could cut into the earnings of companies that make industrial equipment. The Commerce Department also reported that construction of new homes plunged in April.

The two reports drove traders into the relative safety of government bonds, pushing yields to their lowest level this year.

“There’s a high degree of caution right now,” said Jack Ablin, chief investment officer at Harris Private Bank in Chicago. “People are worried about big picture issues that need to be resolved.”

The Dow Jones industrial average fell 68.79 points, or 0.55 percent, to 12,479.58. The Standard Poor’s 500-stock index lost 0.49, or .04 percent, to 1,328.98. The Nasdaq rose .90, or 0.03 percent, to 2,783.21.

Even with a majority of companies reporting stronger earnings, the stock market has lost some of its momentum in the last few weeks. Concerns are growing that high gas prices will weigh on the economy, pinch consumer spending and cut into corporate profits.

Companies reported mixed results Tuesday. Wal-Mart Stores said its income rose 3 percent in the first quarter, but sales fell at stores open at least a year for the eighth quarter in a row. Wal-Mart’s stock fell nearly 1 percent.

Sales also slipped in the first quarter at Home Depot, but the retailer’s income jumped 12 percent and beat analysts’ expectations. The stock rose 1.2 percent.

The Treasury’s 10-year note rose 8/32, to 100 2/32. The yield fell to 3.12 percent, from 3.15 percent late Monday.

Article source: http://feeds.nytimes.com/click.phdo?i=722864d69355e58be931a61cb22f6662

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