* Morgan Stanley up more than 5 pct after results
* Weak outlook weighs on Intel, down 6 pct
* U.S. Republicans weigh short-term debt limit increase
* Indexes down: Dow 0.2 pct; S&P 0.3 pct; Nasdaq 0.5 pct
By Angela Moon
NEW YORK, Jan 18 U.S. stocks edged lower on
Friday from a five-year high for the S&P 500 as a weak outlook
from tech heavyweight Intel offset a better-than-expected
quarterly profit at Morgan Stanley.
Shares of Intel Corp slumped 6.3 percent to $21.25
a day after it forecast quarterly revenue below analysts'
estimates and announced plans for increased capital spending
amid slow demand for personal computers.
"Intel earnings weren't that bad, although their revenue was
weak. It sparks fears about not only the company but about the
whole PC sector, and that's pressuring the market today," said
Tim Ghriskey, chief investment officer of Solaris Group in
Bedford Hills, New York.
The Intel results were offset somewhat by a gain of more
than 7 percent in shares of Morgan Stanley, which
reported a fourth-quarter profit after a year-earlier loss,
helped by higher revenue at the bank's institutional securities
business. Its stock jumped 7.4 percent to $22.29.
Overall, S&P 500 fourth-quarter earnings rose an estimated
2.5 percent, according to Thomson Reuters data. Expectations for
the quarter have dropped considerably since October, when a 9.9
percent gain was estimated.
The Dow Jones industrial average was down 19.89
points, or 0.15 percent, at 13,576.13. The Standard & Poor's 500
Index was down 4.58 points, or 0.31 percent, at
1,476.36. The Nasdaq Composite Index was down 15.90
points, or 0.51 percent, at 3,120.10.
On Thursday, the S&P 500 rose to its highest since late
2007, and that could prompt investors to lock in recent gains,
But despite the day's decline, market sentiment was still
positive on speculation that chances were better of avoiding a
debt ceiling fight in Washington. House Republicans signaled on
Thursday they might support a short-term extension of U.S.
borrowing authority next month.
"The debt ceiling issue is sort of out of the news. The
market has definitely become complacent. And we all know that
the issue will be dealt with, we just need to find out when. If
December is any guide, they are going to leave it up to the last
minute so the market is definitely more complacent than it
should be for now," Ghriskey said.
Economic data from China provided some support to the
market, though the focus remained on U.S. corporate earnings.
The country's economy grew at a modestly faster-than-expected
7.9 percent in the fourth quarter, the latest sign the world's
second-biggest economy was pulling out of a post-global
financial crisis slowdown which saw it grow in 2012 at its
weakest pace since 1999.
General Electric reported a better-than-expected rise
in earnings, spurred by robust demand in China and oil-producing
countries. Shares were up 2.9 percent to $21.91.
Despite the gains by Morgan Stanley, financial stocks sagged
as Capital One Financial reported disappointing profit.
Capital One slumped 8.1 percent to $56.60, while the KBW bank
index slipped 0.8 percent.
Research In Motion climbed 5.6 percent to
$15.74 after Jefferies Group boosted the BlackBerry maker's
rating and price target.