US STOCKS-Market dips on financials' poor profit view
(Updates to late morning)
By Jennifer Coogan
NEW YORK, Dec 4 (Reuters) - U.S. stocks fell on Tuesday after a brokerage cut its earnings outlook for major Wall Street companies and as uncertainty about the outlook for a credit crisis recovery mounted.
Shares of Goldman Sachs (GS.N), Lehman Brothers LEH.N, Merrill Lynch MER.N and Morgan Stanley (MS.N) fell after JPMorgan Chase (JPM.N) cut its earnings estimates on the brokerages, citing writedowns, slowdowns in mergers and acquisitions and reduced opportunities for other fees.
Analysts said expectations for a Federal Reserve interest-rate cut were already reflected in a four-day rally by stocks last week. The market awaited Friday's November employment report for the next hint about the future course of rates. The Fed's next policy meeting is set for Dec. 11.
"Financials are a little bit of a drag on sentiment today," said Marc Pado, U.S. market strategist at Cantor Fitzgerald & Co. in San Francisco. "There's an awful lot coming up, and it behooves many just to sit to the sidelines and wait."
The Dow Jones industrial average .DJI was down 20.73 points, or 0.16 percent, at 13,293.84. The Standard & Poor's 500 Index .SPX was down 6.09 points, or 0.41 percent, at 1,466.33. The Nasdaq Composite Index .IXIC was down 5.33 points, or 0.20 percent, at 2,631.80.
A top U.S. Treasury official said market anxiety had deepened, an assessment borne out by ever tighter interbank rates, and the process of rebuilding confidence would be "long and slow." For details, see [ID:nL04419971].
Goldman Sachs cut its forecast for 2007 and 2008 operating earnings per shares for S&P 500 companies. [ID:nN04205097].
Goldman shares were down 2.4 percent to $221.49 Merrill shares were down 2.7 percent to $57.46. Lehman was down 2.5 percent at $59.83.
On the upside, shares of Dell rose as much as 2 percent after the computer maker said its board authorized a $10 billion stock repurchase plan and that it will resume buying back stock this week. [ID:nN04491152]. Later its shares rose 0.6 percent to $24.10.
Shares of Merck & Co Inc (MRK.N) were down 1.4 percent to $57.92 after the blue-chip drug maker gave an earnings forecast for 2008 whose range was mostly below expectations. [ID:nN04479497] (Additional reporting by Caroline Valetkevitch; Editing by Kenneth Barry)
