Published on Reuters
BONDS NEWS JULY 9, 2008 / 11:15 AM
* Financials drag on the market on credit concerns
* Oil’s rebound and Iran’s missile tests spark caution
* Alcoa provides a bright spot after quarterly profit (Updates to midmorning)
By Ellis Mnyandu
NEW YORK, July 9 (Reuters) – U.S. stocks were little changed in choppy trading on Wednesday as fears of further credit losses in the financial sector and rebounding oil prices offset Alcoa Inc’s (AA.N) stronger-than-expected quarterly profit.
Higher oil prices contributed to declines in shares of big manufacturers, including General Electric (GE.N), down more than 1 percent, and 3M Co (MMM.N), down nearly 2 percent.
Shares of credit card and travel services company American Express (AXP.N) led financials lower with a decline of more than 2 percent.
Investors worried about the outlook for technology spending after John Chambers, the chief executive of Cisco Systems Inc (CSCO.O) told Reuters the network equipment company’s customers expected a recovery early next year rather than later this year. In May, he had said a pick-up was more likely sooner. For details, see [ID:nN08255800].
“There’s still a lot of uncertainty out there, so it’s going to be hard for the market to make any real progress,” said Alan Lancz, president of Alan B. Lancz & Associates Inc, an investment advisory firm in Toledo, Ohio.
“Real estate prices are going down and the earnings power that financial stocks had is going to be gone forever.”
The Dow Jones industrial average .DJI slipped 2.20 points, or 0.02 percent, to 11,382.01. The Standard & Poor’s 500 Index .SPX edged up 1.57 points, or 0.12 percent, to 1,275.27. The Nasdaq Composite Index .IXIC shed 2.72 points, or 0.12 percent, to 2,291.72.
U.S. crude was about $2 barrel higher earlier after Iran test-fired medium range missiles capable of reaching Israel and U.S. military bases in the Middle East. The price later trimmed its advance and was 17 cents higher at $136.24 a barrel.
GE shares fell to $27.55 on the New York Stock Exchange, while shares of 3M dropped to $69.66.
Shares of American Express declined to 2.7 percent to $40.20, while shares of Merrill Lynch MER.N slid almost 4 percent to $31.59 after ratings agency Fitch Ratings said it may cut the investment bank’s debt rating.
On the Nasdaq, Cisco shares fell 3.8 percent to $22.03.
Shares of Alcoa, however, climbed almost 2 percent to $32.93 on the NYSE. Exxon Mobil (XOM.N) gained more than 1 percent. (Editing by Kenneth Barry)