Bank profits, oil hit Wall St; Yahoo, Intel up late
NEW YORK (Reuters) - U.S. stocks fell on Tuesday after disappointing results from Wells Fargo & Co (WFC.N) and other big banks combined with soaring oil prices to sour the outlook for corporate profits.
Oil thundered above $88 a barrel for the first time on supply worries as tensions rose between Turkey and Kurdish separatists in northern Iraq. Investors worried that high energy prices could cut into consumer and business spending.
Shares of Wells Fargo and KeyCorp (KEY.N) dropped after the banks' profits fell short of Wall Street's estimates as credit losses took a toll, a day after Citigroup Inc (C.N)reported a 57 percent tumble in third-quarter profit.
"We're coming into the reality of earnings season and for many sectors of the market such as financial and consumer, that's kind of scary," said Emanuel Weintraub, managing director at Integre Advisors in New York.
"The fact that earnings have been disappointing so far, has also made investors focus on the negative of higher oil prices, which in the past few months, it has often shrugged off."
The Dow Jones industrial average .DJI fell 71.86 points, or 0.51 percent, to end at 13,912.94. The Standard & Poor's 500 Index .SPX slid 10.18 points, or 0.66 percent, to 1,538.54. The Nasdaq Composite Index .IXIC dropped 16.14 points, or 0.58 percent, to 2,763.91.
YAHOO! AND INTEL BEAT STREET
Two technology bellwethers posting forecast-topping results after the bell will likely give the major U.S. stock indexes a lift in Wednesday's trade.
Web search company Yahoo (YHOO.O) shares rose 5.6 percent in extended trading, while chip maker Intel (INTC.O) climbed 5 percent.
Nasdaq futures NDc1 and S&P 500 futures shot higher after the results.
But shares of International Business Machines (IBM.N), the biggest technology services company, dropped 1.9 percent after the bell, after its earnings met expectations.
Richard Williams, senior analyst at Summit Analytic Partners in New Jersey said that given the benefit from the weak dollar, the IBM results were "just not going to cut it."
HOUSING WORST SINCE WORLD WAR II
The bank earnings and comments from Federal Reserve Chairman Ben Bernanke on Monday and Treasury Secretary Henry Paulson on Tuesday dashed investors' hopes for a fast resolution of the global credit problems.
Paulson and Bernanke added their voices to those warning that the housing slump will likely hurt the U.S. economy for some time. Continued...
