NEW YORK – Stocks fell Tuesday as higher oil prices spurred caution and a bearish earnings outlook from Texas Instruments cast a shadow over tech shares.
The Dow Jones industrial average lost 24.24 points, or 0.22 percent, to end at 10,912.62. The technology-laced Nasdaq Composite Index fell 16.66 points, or 0.8 percent, to close at 2,073.55, while the broader Standard & Poor's 500 index ended down 5.88, or 0.48 percent, at 1,219.43.
Tuesday's session marked a break in the recent rally that saw the Dow and S&P close at 3 ½ year highs on Friday.
Texas Instruments Inc. (TXN), the world's largest maker of chips for cell phones, said television and projector makers ordered too many of its Digital Light Projection chips at the end of last year and have since cut back orders after weaker end-of-year consumer demand. TI said it now expects revenue in the range of $2.91 billion to $3.03 billion and earnings of 22 cents to 24 cents per share. Previously, the company had targeted sales of $2.9 billion to $3.14 billion in the first quarter and earnings of 22 cents to 26 cents a share. Texas Instruments fell 3.8 percent, or $1.03 to $26.34.
That sent other chip stocks lower. The Philadelphia Stock Exchange Semiconductor Index fell 1.4 percent after gaining nearly 2 percent on Monday.
Higher oil prices hung over the markets. NYMEX crude oil futures were near $55 a barrel on increased fund buying after heating oil rallied as a wintry blast swept the U.S. Northeast, the world's biggest heating oil market.
NYMEX crude for April delivery rose 71 cents to $54.60 — within striking distance of the March 3 high of $55.20. Higher energy costs can hurt corporate profits and dampen consumer spending.
"The biggest news was Texas Instruments and I think that everyone obsessed on that," said Paul McManus, chief investment strategist for Independence Investments.
But energy companies were higher as oil spiked, limiting losses on the blue-chip Dow. Exxon Mobil Corp. (XOM), a Dow component, rose 10 cents, or 0.16 percent to $63.10.
Apple Computer (AAPL) dropped $2.22, or 5.19 percent, to $40.53 after Sony Corp. (SNE) launched a new lineup of cheaper Walkman portable music players in another attempt to grab back market share from Apple and its popular iPod (search) device.
Qualcomm Corp. (QCOM) dropped $1.10 to $36.29 after the company announced that Paul Jacobs, son of Chief Executive Officer Irwin Mark Jacobs, would succeed his father in the top post on July 1. The elder Jacobs, who co-founded Qualcomm in 1968, will remain as chairman, the company said.
Dow component McDonald's Corp. (MCD) reported a 4.6 percent rise in U.S. sales in February at stores open at least a year. Global net sales rose 4.4 percent for the month at the fast food chain. McDonald's fell 73 cents to $33.48, however, as investors worried about falling European sales.
Pfizer Inc. (PFE) fell 1.6 percent to $26.76. A study presented on Tuesday said heart disease patients who took high doses of Pfizer's cholesterol-treatment Lipitor (search) had fewer heart attacks and strokes, but it boosted risk of death from other causes.
Biogen Idec Inc. (BIIB) was up 76 cents at $38.35 despite a report in The Wall Street Journal cited a former employee who said the company provided illegal discounts to physicians who prescribed the drug maker's products. The former employee, who was fired from the company, sued Biogen last month.
In its first earnings report since going public in December, Las Vegas Sands Corp. (LVS) reported earnings of 16 cents per share for the quarter, on par with analysts' expectations. The operator of the Venetian Hotel Resort Casino and the Sands Macau Casino missed its full-year earnings targets, however. Las Vegas Sands slid $2.45 to $47.35.
Kroger Co. (KR), the nation's biggest grocery chain, dropped 87 cents to $16.85 after the company reported a wider-than-expected fourth-quarter loss and missing Wall Street forecasts by 7 cents per share. The company blamed an impairment charge related to struggling stores.
Declining issues outnumbered advancers by nearly 8 to 5 on the New York Stock Exchange, where volume was moderate.
The Russell 2000 index of smaller companies was down 5.88, or 0.9 percent, at 637.98.
Overseas, Japan's Nikkei stock average fell 0.32 percent. In Europe, Britain's FTSE 100 closed down 0.32 percent, France's CAC-40 dropped 0.55 percent for the session, and Germany's DAX index lost 0.71 percent.
Reuters and The Associated Press contributed to this report.