NEW YORK – Stocks fell Monday as a sharp rise in oil prices and concerns about the upcoming Iraqi election offset a mostly positive bag of earnings news.
The Dow Jones industrial average (search) was down 24.38 points, or 0.23 percent, to finish at 10,368.61. The Standard & Poor's 500 Index (search) was down 4.12 points, or 0.35 percent, to end at 1,163.75. The Nasdaq Composite Index (search) was down 25.57 points, or 1.26 percent, to close at 2,008.70.
The Nasdaq, the Dow and the S&P 500 all ended lower for the fourth consecutive session. The Nasdaq closed at its lowest level since Nov. 3, the Dow since Nov. 4 and the S&P 500 since Nov. 10.
Market watchers were growing increasingly concerned about the slide in stocks throughout January, which some analysts blamed on Wall Street's strong fourth quarter performance.
Crude oil futures prices rose after the weekend snowstorm boosted demand for heating oil. A car bomb attack in Baghdad, targeting the prime minister's party headquarters, did little to ease the anxiety of investors ahead of Iraq 's Jan. 30 election. Oil prices sank early in the day, but settled up 2 cents at $48.95 per barrel on the New York Mercantile Exchange (search).
"In general, the market is waiting for the elections in Iraq," said Barry Berman, head trader for Robert W. Baird & Co. in Milwaukee. "And oil prices have been on the move up for the past week."
Crude prices have threatened to breach the $50 level faced with threats to Iraqi oil flows ahead of Sunday's elections and speculation that OPEC's (search) ministerial meeting the same day could yield an output cut.
Energy stocks were boosted by the crude prices, with Exxon Mobil Corp. (XOM) rising about 1.6 percent to $51.25 and ChevronTexaco (CVX) climbing 1.9 percent to $53.
Among Monday's gainers, Dow component American Express Co. (AXP) rose 67 cents to $52.60 after reporting fourth-quarter earnings of $896 million, or 71 cents a share — a penny ahead of analysts' estimates. The financial services company's earnings surged 17 percent, thanks to record cardmember spending, higher average cardmember lending balances and strong travel sales.
McDonald's Corp. (MCD) rose 49 cents to $31.74 after CIBC World Markets raised its rating on the fast-food company to "sector outperformer" from "sector performer," saying McDonald's European business was poised for a rebound.
By contrast, CIBC lowered its rating on Wendy's International Inc. (WEN) to "sector performer" from "sector outperformer," citing greater competition from McDonald's in premium products and high beef prices. Wendy's lost 42 cents to $37.33 .
Investors also continued to eye quarterly earnings results. This week's calendar of releases includes 10 of the 30 Dow industrials, along with more than 150 other major companies.
Investors in the tech-heavy Nasdaq, which is down 7.66 percent year-to-date, may have been unsettled when chipmaking giant Infineon Technologies AG (search) warned that second-quarter earnings could slow. The Munich, Germany-based company reported that first-quarter net profits quadrupled thanks to one-time license income.
Jim Fehrenbach, head of Nasdaq trading at Piper Jaffray in Minneapolis, said Infineon's statement was weighing on the Nasdaq, but added: "The larger force at work here is no one is going to buy stocks until stocks start going up.
"I would call earnings uninspiring so far. There has been nothing to get anyone excited about doing anything. It's been frustrating and that is bearing out in the market."
Microsoft Corp. (MSFT) gained 2 cents to $25.67 after the Redmond, Wash., software company announced in Belgium it will not appeal an interim European Union ruling forcing it to strip Media Player from its Windows platform.
Procter & Gamble Co. (PG) fell 44 cents to $55.21 after UBS downgraded the stock to "neutral" from "buy" on its recent price rise.
Shares in Polo Ralph Lauren Corp. (RL) also dropped, down 2.7 percent, or $1.08, to $39.03, after a downgrade to "neutral" from "buy" by Merrill Lynch.
Station Casinos Inc. (STN), a Las Vegas casino operator, posted a fourth-quarter profit, reversing a year-earlier loss, while Pilgrim's Pride Corp., the No. 2 U.S. poultry producer, said quarterly earnings rose nearly five-fold due to lower feed costs and an acquisition late in 2003.
The Wall Street Journal reported that directors of Hewlett-Packard Co. (HPQ), unhappy with the uneven performance of the printer and computer maker, are considering a management reorganization that would distribute some key day-to-day responsibilities of Chairman and Chief Executive Carly Fiorina among other executives.
Shares of Corinthian Colleges Inc. (COCO) rose 15 percent before the bell after the education company said the Securities and Exchange Commission had ended an informal inquiry. On the Inet electronic brokerage system, Corinthian climbed $2.58 to $19.70.
Trading was active, with 1.49 billion shares changing hands on the New York Stock Exchange, just above the 1.46 billion daily average for last year. About 2.13 billion shares were traded on Nasdaq, above the 1.81 billion daily average last year.
Decliners outnumbered advancers on the New York Stock Exchange by about 10 to 7 and by about 7 to 3 on Nasdaq.
The Russell 2000 index of smaller companies slipped 6.55, or 1.07 percent, to 604.53.
Overseas, Japan's Nikkei stock average rose 0.45 percent. Britain's FTSE 100 advanced 0.19 percent, Germany's DAX index was off 0.28 percent, and France's CAC-40 fell 0.14 percent.
Reuters and the Associated Press contributed to this report.
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