* J&J drops after sales miss Wall Street's expectations
* Banks fall, Goldman Sachs downgraded
* Intel jumps on results after the bell
* Dow off 0.2 pct, S&P 500 off 0.3 pct, Nasdaq up 0.04 pct
* For up-to-the-minute market news, click []
(Updates with Intel, volume)
By Leah Schnurr
NEW YORK, Oct 13 (Reuters) - U.S. stocks weakened on
Tuesday as disappointing sales from Johnson & Johnson <JNJ.N>
stirred jitters about the strength of earnings, snapping the
S&P 500's six-day winning streak.
With the last two earnings periods characterized by cost
cutting, investors have been hopeful that companies may start
to show revenue growth in third-quarter results or improved
outlooks.
Though investors remain optimistic about the earnings
season, the hope for strong revenue could be premature. Indeed,
Johnson & Johnson beat Wall Street's earnings expectations, but
reported revenue that was below forecasts, sending its shares
down 2.4 percent to $61.01. For details, see []
But after-hours results from Intel <INTC.O> could bode well
for Wednesday's session after the chip maker reported earnings
and revenue that surpassed expectations. []
"People are on the edge of their seats," said Ronald
Knipping, managing principal at the wealth management division
of Rehmann, a Michigan-based financial advisory firm.
"The leading indicator is going to be revenue growth, and
right now there's none."
Financial shares were pressured, with several major banks
reporting results this week. Goldman Sachs Group Inc <GS.N>
fell 1.5 percent to $187.23 after influential banking analyst
Meredith Whitney downgraded the stock, saying the upside could
be limited for the company in the medium term.[].
The Dow Jones industrial average <> declined 14.74
points, or 0.15 percent, to end at 9,871.06. The Standard &
Poor's 500 Index <.SPX> slipped 3.00 points, or 0.28 percent,
to 1,073.19. But the Nasdaq Composite Index <> inched up
just 0.75 of a point, or 0.04 percent, to 2,139.89.
The Nasdaq stayed above water after Cisco Systems Inc
<CSCO.O> agreed to buy Starent Networks Corp <STAR.O> for $2.9
billion, or $35 per share. Cisco's stock added 0.5 percent to
$23.89, while Starent, which makes telecommunications
equipment, surged 16.8 percent to $33.91. [].
INTEL IN FOCUS
Intel also forecast revenue for the current quarter that
was ahead of Wall Street's targets on recovering demand for
personal computers.
Stock index futures jumped following the results, while
Intel shot up 5.2 percent to $21.56 in extended trade.
Healthcare stocks slid during the session after a key
Senate committee endorsed a sweeping healthcare overhaul as it
gained the support of an influential Republican. The proposal
will be merged with the Senate health panel's version and moved
to the full Senate for debate in the next few weeks.
[]
The Morgan Stanley Healthcare Payor index <.HMO> fell 2.3
percent on concerns about what a potential healthcare overhaul
would mean for health insurers' profits.
The S&P financial index <.GSPF> lost 1.1 percent, with
JPMorgan Chase & Co <JPM.N>, Citigroup Inc <C.N>, Goldman Sachs
and Bank of America <BAC.N> all reporting throughout the week.
Volume was moderate on the New York Stock Exchange, with
1.14 billion shares changing hands, below last year's estimated
daily average of 1.49 billion, while on the Nasdaq, about 2.07
billion shares traded, below last year's daily average of 2.28
billion.
Declining stocks outnumbered advancing ones on the NYSE by
a ratio of 17 to 13, while on the Nasdaq, five stocks fell for
every four that rose.
(Additional reporting by Ellis Mnyandu; Editing by Jan
Paschal)
