Stocks slip on oil, drugs; Apple, Amex drop late
NEW YORK (Reuters) - Stocks slipped on Monday, as oil turned higher after last week's sharp drop and Merck and Schering-Plough hurt the pharmaceuticals sector.
But dismal results after the bell from a raft of companies, including American Express (AXP.N), Apple (AAPL.O) and Texas Instruments (TXN.N) set an uglier tone for Tuesday.
Merck's (MRK.N) and Schering-Plough's (SGP.N) shares fell further in extended trade after they reported results. During the regular session, their shares had dropped after their lucrative shared cholesterol-fighting drug failed a clinical trial.
The price of oil dampened the mood as it rose more than $2 to end above $131 a barrel, adding to concerns about the impact of higher fuel costs on consumer spending. Oil's rise came on the heels of its biggest weekly decline ever. The S&P retail index fell 1.7 percent.
Bank stocks added to last week's gains during Monday's session and kept the broader market's losses in check, after Bank of America joined its rivals Wells Fargo (WFC.N), JPMorgan Chase (JPM.N) and Citigroup (C.N) in reporting unexpectedly strong results.
"The Merck news is specific to that sector -- you also have oil gaining again, which is hurting retailers and the broader market," said Robert Francello, head of equity trading for Apex Capital hedge fund in San Francisco.
The Dow Jones industrial average fell 29.23 points, or 0.25 percent, to 11,467.34. The Standard & Poor's 500 Index dipped 0.68 of a point, or 0.05 percent, to 1,260. The Nasdaq Composite Index slipped 3.25 points, or 0.14 percent, to 2,279.53.
BAD NEWS AFTER THE BELL
But financials looked set to start Tuesday in the red. Shares of financial companies ranging from Capital One (COF.N) to Citigroup (C.N) slid after credit card company and Dow component American Express reported a profit that missed Wall Street's estimates. American Express shares fell 7 percent in after-hours trade.
Technology companies, which were already weak in the regular session, took another leg down in extended trade after iPod maker Apple, flash memory card supplier SanDisk and chip maker Texas Instruments (TXN.N) posted results that disappointed investors.
That followed weaker-than-expected earnings from Google (GOOG.O) and Microsoft (MSFT.O) last week.
YAHOO SLIDES, BANK OF AMERICA GAINS
During the regular session, shares of Yahoo Inc (YHOO.O) fell 3.5 percent to $21.67 on Nasdaq. The Internet company agreed to appoint investor Carl Icahn and two of his nominees to its board. The move settles a proxy battle and makes prospects for an immediate transaction with Microsoft Corp (MSFT.O) less likely. Microsoft shares slipped 0.9 percent to $25.64.
Bank of America shares rose 3.9 percent to $28.56 on the New York Stock Exchange and followed other positive earnings surprises by banks last week. ID:nN21389811.
Shares of American International Group (AIG.N) jumped 5.8 percent to $26.53 after Bank of America raised its rating on the insurer to "buy" from "neutral," saying the risk-to-reward ratio has become "very attractive." Continued...
