NEW YORK – Wall Street ended the session mixed Monday after investors eyed manufacturing giant 3M's earnings forecast, which failed to exceed analyst expectations, and anticipated two days of testimony before Congress by Federal Reserve Chairman Alan Greenspan.
The Dow Jones industrial average ended lower 45.72 points, or 0.45 percent, to close the session at 10,094.06. The Nasdaq Composite Index closed higher 0.68, 0.04 percent, at 1,883.83, while the Standard & Poor's 500 index was down 0.49, or 0.04 percent, at 1,100.90.
Dow component 3M Co. (MMM), whose products range from Post-It notes and Scotch tape to drugs and flexible circuits, said quarterly earnings rose, but its shares fell after the maker of Scotch tape and Post-It notes failed to exceed analyst expectations with its raised 2004 earnings forecast. 3M dropped $4.79, or more than 5 percent, to $83.05 and was the biggest drag on the Dow and the broader S&P 500.
Technology bellwether Microsoft Corp. (MSFT) got a boost, however, after a Goldman Sachs analyst said the software maker may beat the consensus forecasts when it reports quarterly results later this week, citing evidence from the reports of computer makers.
Microsoft gained after Goldman Sachs analyst Rick Sherlund said it may beat the consensus forecasts when it reports quarterly results later this week, citing evidence from the reports of computer makers. But the veteran Microsoft analyst left his estimates for the company's fourth quarter, ended in June, unchanged.
Microsoft's shares, which were giving the biggest lift the Nasdaq Composite, were up 47 cents, or 2 percent, at $27.95.
While second-quarter earnings, including 3M's, have generally beaten estimates, investors are now focusing on the rest of 2004, worried that profit growth will slow even as interest rates rise and consumer spending drops off.
The market was also holding its breath ahead of Greenspan's semi-annual testimony on monetary policy before the Senate Banking, Housing and Urban Affairs Committee on Tuesday and again to the House Financial Services Committee on Wednesday. He is likely to assure lawmakers that recent signs of a slowdown are merely a lull and that interest rates need to rise gradually to keep the economic recovery healthy.
"All eyes will be glued on Mr. Greenspan tomorrow and Wednesday," said Peter Cardillo, chief market analyst and chief strategist at SW Bach & Co. "Basically, the biggest uncertainty is the economy, with the threat of higher oil prices and a Fed that has started a rate-hike campaign."
In New York, crude futures ended above $41 a barrel just ahead of the expiration on Tuesday of the August contract. NYMEX August crude rose 39 cents to settle at $41.64 a barrel.
But major oil companies' stocks barely reacted to the higher crude prices. Exxon Mobil Corp.(XOM) was up 7 cents, or 0.2 percent, at $45.90, while ChevronTexaco (CVX) was down 23 cents, or 0.2 percent, at $95.17.
Occidental Petroleum Corp. (OXY) saw its earnings surge 55 percent in the quarter due to higher energy prices, even as it announced the retirement of its president. Occidental fell 47 cents to $50.00.
Wal-Mart Stores Inc. (WMT) helped stocks after it maintained its July sales forecast on Monday and said the vital back-to-school shopping season was off to a good start. Shares rose 21 cents to $52.86.
Kraft Foods Inc. (KFT), the largest North American food maker, reported quarterly earnings before items that met expectations but cut its full-year forecast. Shares were up 83 cents at $31.13. Parent company Altria Group Inc. (MO), another Dow component, rose 17 cents to $48.83.
Boston Scientific Corp. (BSX) fell after it said on Friday it had expanded its recall of a popular heart device because of a malfunction and said the recall would hurt its second-quarter results. The firm's stock was down $1.25, or 3 percent, at $36.15 and was the most actively traded stock on the NYSE.
Toolmaker Black & Decker Corp. (BDK) soared above a 20-year high after it said it will buy Pentair Inc.'s (PNR) power tools group for about $775 million, nearly doubling the sales of its North American professional tools business. It also reported a 61 percent rise in second-quarter profit.
After rising as high as $69.50, Black & Decker was up $7.17, or 12 percent, to $67.49 on the New York Stock Exchange.
Advancing issues barely outnumbered decliners on the New York Stock Exchange, where volume came to 1.31 billion shares, compared with 1.44 billion at the same point on Friday, when turnover was inflated by options expirations.
The Russell 2000 index of smaller companies was down 0.75, or 0.1 percent, at 554.73.
Overseas, Japan's Nikkei stock average rose 0.2 percent. In Europe, Britain's FTSE 100 closed down 0.4 percent, France's CAC-40 dropped 0.5 percent for the session, and Germany's DAX index fell 0.9 percent.
Reuters and The Associated Press contributed to this report.