(Updates to close)
By Kristina Cooke
NEW YORK, April 14 (Reuters) - U.S. stocks edged lower on
Monday after an unexpected quarterly loss from Wachovia Corp
<WB.N> dragged down the financial sector, overshadowing strong
gains in energy companies as oil closed at a record.
Goldman Sachs added to the market's negative tone after it
said the quarterly earnings season, which is just starting,
looks "awful" and that reports still to come will be generally
disappointing and drive the S&P 500 lower in coming weeks.
Wachovia, the No. 4 U.S. bank, fueled fears about anemic
earnings when it said it would cut its dividend, eliminate
jobs and raise capital of $7 billion after becoming the latest
casualty of the global credit crunch. For details, see
[]. Its stock dropped 8 percent, while the S&P's
financial-sector index <.GSPF> fell 2.4 percent.
"Today all the troubles were in financial services. This
is expected to be a big week in earnings and it feels like the
calm before a potential storm when we get more earnings
information," said Linda Duessel, market strategist at
Federated Investors in Pittsburgh.
Still, energy companies kept index losses in check as the
price of oil <CLc1> rose to a record settlement just short of
$112 a barrel.
A surprising rise in U.S. retail sales also helped, after
data showed a modest increase in March, pushed up by a jump in
gasoline sales, according to a government report.
"Retail sales were a little bit better and there is a
rotating into energy due to the belief that the high price of
oil could have staying power," Duessel said.
The Dow Jones industrial average <> slipped 23.36
points, or 0.19 percent, ending at 12,302.06. The Standard &
Poor's 500 Index <.SPX> declined 4.51 points, or 0.34 percent,
to 1,328.32. The Nasdaq Composite Index <> dropped 14.42
points, or 0.63 percent, to 2,275.82.
With earnings season in full swing, investors are taking
their trading cues from corporate results. Wall Street
analysts expect S&P 500 earnings to show a 13.8 percent
decline in quarterly profits compared with an 11.8 percent
drop projected one week ago, according to Reuters Estimates.
Stocks took a sharp tumble on Friday when economic
bellwether General Electric Co <GE.N> reported an unexpected 6
percent drop in earnings. That raised concerns more companies
could miss earnings estimates.
On Monday, Wachovia's stock ended down 8.1 percent at
$25.55 and was the heaviest weight on the S&P.
Three other Dow components in the banking sector also
declined, with shares of Bank of America <BAC.N> down 3.7
percent at $35.58, Citigroup <C.N> down 3.6 percent at $22.51
and JPMorgan Chase & Co <JPM.N> down 2.4 percent at $41.50.
Among oil companies, shares of Devon Energy <DVN.N> gained
2.6 percent to $112.06 and Transocean Inc <RIG.N> shares rose
4.7 percent to $151.89.
Exxon Mobil <XOM.N> shares advanced 1.2 percent to $89.70
and ranked second among the stocks buoying the Dow average.
Movie rental chain Blockbuster Inc <BBI.N> said on Monday
that it had offered to buy struggling electronics retailer
Circuit City Stores Inc <CC.N>. []. Circuit City
shares surged 27.4 percent to $4.97, while Blockbuster shares
slid 10.2 percent to $2.81 as some investors showed skepticism
about the combination.
In other earnings news, building maintenance supply
company W.W. Grainger Inc <GWW.N> posted a 12 percent rise in
first-quarter profit, beating analysts' forecasts. Its stock
rose 2.2 percent to $81.73.
Trading was light on the New York Stock Exchange, with
about 1.18 billion shares changing hands, below last year's
estimated daily average of roughly 1.90 billion, while on
Nasdaq, about 1.63 billion shares traded, also falling short
of last year's daily average of 2.17 billion.
Declining stocks outnumbered advancing ones by a ratio of
about 3 to 2 on both the NYSE and on Nasdaq.
(Editing by Jan Paschal)
