NEW
YORK (Reuters) - U.S. stocks ended down slightly on Wednesday, as
a lower 2005 gross domestic product forecast from the White House
more than offset enthusiasm over a higher quarterly profit outlook
from chipmaker Texas Instruments.
The Nasdaq took a blow from Internet stocks like Yahoo Inc., which
fell after a report revived concerns about slipping prices for Web
search advertising.
Investors also were wary of wading into the market before Federal
Reserve Chairman Alan Greenspan's remarks on the U.S. economy, expected
on Thursday, because of concerns he might say the central bank is
not yet finished raising interest rates.
The Dow Jones industrial average dipped 6.21 points, or 0.06 percent,
to end at 10,476.86 and the Standard & Poor's 500 Index edged
down 2.59 points, or 0.22 percent, to 1,194.67. The Nasdaq Composite
Index slipped 6.98 points, or 0.34 percent, to close at 2,060.18.
"The White House lowering the GDP forecast did not meet with
market approval at first," said Barry Hyman, equity market
strategist at Ehrenkrantz, King, Nussbaum. "I think there is
also legitimate concern ahead of Mr. Greenspan's statement because
it could indicate the Fed is not going to stop interest-rate hikes
early, so that's a cause for nervousness."
In its mid-year economic forecast, the White House predicted fourth-quarter-over-fourth-quarter
growth of 3.4 percent, compared with a December forecast that pegged
growth for the same period at 3.5 percent. The White House also
raised its inflation forecast, saying it expects the consumer price
index to increase 2.9 percent, fourth quarter over fourth quarter,
due to "volatile energy prices." That is above the Bush
administration's previous outlook in December for 2 percent CPI
growth.
On Thursday, Greenspan will testify on the economic outlook before
the Joint Economic Committee, a congressional panel of U.S. senators
and representatives, at 10 a.m. EDT. (1400 GMT).
In Nasdaq trading, Internet stocks slid after a report released
on the Web Tuesday night said the prices advertisers paid to buy
search engine keywords had dropped.
Shares of Google Inc. fell 4.6 percent, or $13.56, to $279.56, while
eBay Inc. dropped nearly 2 percent, or 71 cents, to $37.10, and
Yahoo shed 2.2 percent, or 81 cents, to $36.63.
Texas Instruments, the world's largest maker of chips for mobile
phones, climbed 2.3 percent, or 62 cents, to $27.90 a day after
it raised its second-quarter earnings forecast.
Shares of Biogen Idec fell almost 5 percent, or $1.72, to $33.35
on Nasdaq. In a research note, a Bear Stearns analyst warned of
possible European competition for the company's Avonex multiple
sclerosis drug.
Among blue-chip advancers, shares of General Motors Corp. jumped
4.2 percent, or $1.29, to $32.02, after investor Kirk Kerkorian
said he had increased his stake in the world's largest automaker,
although less than he had hoped.
And Caterpillar Inc. rose 2.2 percent, or $2.05, to $96.58 after
the heavy equipment maker raised its dividend and set a 2-for-1
stock split.
In contrast, McDonald's Corp. shares fell 1.2 percent, or 34 cents,
to $29.23 after it said its May sales missed expectations.
Shares of auto and truck parts maker ArvinMeritor Inc. soared almost
24 percent, or $3.40, to $17.79 after it said it expected quarterly
and full-year earnings to be near the top end of previous forecasts.
Trading was moderate, with 1.33 billion shares changing hands on
the New York Stock Exchange, below the 1.46 billion daily average
for last year. About 1.64 billion shares were traded on Nasdaq,
below the 1.81 billion daily average last year.
The number of stocks falling outnumbered those rising by about 9
to 7 on the NYSE. On Nasdaq, decliners outpaced advancers by a ratio
of about 3 to 2.
|
