U.S. stock prices were mixed Monday, in a lackluster trading session, as investors contemplate the impact of a sluggish economy on corporate America. This week and next, many U.S. companies will turn in their third quarter earnings results, and most of them are expected to reflect the slowdown.
The Dow Jones Industrial Average eked out a modest three point gain, closing at 9,348. But the broader Standard & Poor's 500 Index dropped almost two points to 1,090, while the tech-weighted Nasdaq composite lost seven points to finish the day at 1,696.
Semiconductors weighed on the market after several analyst downgrades. Investors drove down shares of leading chip maker Intel, a Dow component and also a major player in the Nasdaq. Intel reports its quarterly earnings Tuesday.
Experts say the terrorist attacks of September 11 have hurt the chip sector, which now is not expected to recover before late next year.
Meanwhile, the downturn in U.S. manufacturing has claimed a prominent victim. Bethlehem Steel, the third largest U.S. steel producer, filed for bankruptcy protection Monday. The company blamed foreign competition and big pension costs for retired employees.
Investment strategist Peter Kenny does not see much in the near term that would give the markets a boost. He says there is too much uncertainty for investors to deal with. "You get up in the morning. You don't know what the news is. Because of the uncertainty there is a lack of commitment," he says. "And now we find ourselves in something of a fairly tight trading range over the last five or six sessions. And that may continue to go forward, though I think the bias will be to the down side, simply because the market needs to take some profits and refind some sort of a base to work with."
Besides worries over possible bioterrorism following the hijacked airliner events of last month, the markets have found nothing to cheer about in U.S. corporate performance. Third-quarter earnings are expected to fall to their lowest level in a decade, declining by more than 20 percent. And many companies have warned that the fourth quarter also looks weak.
Bank of America Monday posted profits slightly above estimates but lower than they were this time last year. The third-largest U.S. bank also reported net income fell by more than 50 percent, as it scrambled to protect itself against bad loans.