NEW YORK (CNN/Money) -
The Nasdaq tumbled Monday, notching a new 2004 low, while the broader market was mixed, as strong earnings from American Express and others failed to compete with worries about corporate profits in the second half of the year.
The Nasdaq composite (down 10.07 to 1,839.02, Charts) lost 0.5 percent, managing to recover from steeper losses earlier in the session. However, the decline was enough to push the index to a fresh 2004 low. It was the composite's lowest close since October 2, 2003.
The Standard & Poor's 500 (down 2.13 to 1,084.07, Charts) index lost 0.2 percent, and the Dow Jones industrial average (down 0.30 to 9,961.92, Charts) closed unchanged.
Stocks popped at the open, bouncing after last week's steep sell-off. But the sprint was short-lived, and the indexes soon returned to the red, where they've been for the better part of a month.
Strong earnings from American Express, BellSouth and others boosted those stocks and their sectors, but earnings did little for the broader market. As it was for most of July, positive news was treated as unsurprising, and negative news was treated as very disappointing.
"The market remains technically weak," said Peter Cardillo, chief market analyst at S.W. Bach & Co. "The story hasn't changed."
"People remained concerned about earnings in the second half, volume is light and, until we get some sizzling news on the economy, those concerns will remain," he said.
Earnings are due Tuesday before the open from DuPont (DD: Research, Estimates), Lockheed Martin (LMT: Research, Estimates), R.J. Reynolds (RJR: Research, Estimates), U.S. Steel (X: Research, Estimates), Verizon (VZ: Research, Estimates) and others. (For a look at these and other earnings due this week, click here.)
Reports on consumer confidence and new home sales are due after the open Tuesday. Confidence in July is expected to inch up to 102 from 101.9 in June. New home sales are expected to have fallen to a 1.261 million unit annual rate in June from a 1.369 million unit annual rate in May.
In addition to earnings and economic news, investors are also bound to keep an eye on the Democratic National Convention in Boston, which starts Monday evening. Analysts say it won't have much of an impact on trade, assuming that it passes safely. There have been warnings of a potential terrorist attack targeting the convention.
What moved?
The Dow managed to close nearly unchanged thanks to strength in several of its issues.
Microsoft (MSFT: up $0.63 to $28.66, Research, Estimates) advanced, following a bullish Barron's cover story. The story argued that Microsoft remains a growth stock and is getting ready for more revenue gains and increasing profits.
Component American Express (AXP: up $0.79 to $48.90, Research, Estimates) gained after it reported on Monday afternoon earnings and revenue that rose from a year earlier and topped expectations.
NYSE-traded BellSouth (BLS: up $0.91 to $26.81, Research, Estimates) gained after it reported solid earnings that rose from a year earlier and edged estimates. That gave a lift to Dow components and Baby Bells Verizon (VZ: up $1.18 to $36.50, Research, Estimates) and SBC Communications (SBC: up $0.53 to $24.75, Research, Estimates).
Among other movers, shares of AT&T (T: up $0.70 to $14.72, Research, Estimates) edged higher following a Newsweek article that said it was a likely takeover candidate, which has been speculated for some time. Reuters reported in late morning that Kohlberg Kravis Roberts, one firm cited in the article as considering a buyout, has denied considering a deal.
Among individual issues, King Pharmaceuticals (KG: up $2.52 to $12.89, Research, Estimates) rallied more than 24 percent. The drugmaker has agreed to a $4 billion in-stock buyout offer from generic drugmaker Mylan Laboratories (MYL: down $2.56 to $15.51, Research, Estimates). Mylan shares fell 16 percent.
But not all was rosy.
Dow stock Pfizer (PFE: down $0.56 to $31.74, Research, Estimates) lost 1.7 percent after rivals Schering-Plough (SGP: up $0.81 to $19.56, Research, Estimates) and Merck (MRK: down $0.16 to $45.00, Research, Estimates) gained regulatory approval Friday to market their cholesterol pill that seeks to pose a challenge to Pfizer's Lipitor.
Shares of telecom gear maker Andrew (ANDW: down $3.38 to $11.39, Research, Estimates) plunged almost 23 percent in active Nasdaq trade after warning that fiscal fourth-quarter earnings and sales would miss estimates. The company also reported third-quarter results that grew from a year earlier and surpassed estimates, but investors focused on the negative.
Internet security maker Check Point Software (CHKP: down $2.25 to $18.49, Research, Estimates) fell nearly 11 percent after the company forecast third-quarter revenue growth that was below estimates and earnings in a range that could miss estimates.
The major indexes were hit hard last week and for most of July. While most second-quarter earnings have topped estimates, some of the third-quarter forecasts have been muted, particularly in technology. This has lead to fear that corporate profit growth is slowing and might pressure stock valuations through the rest of the year.
In the strong June reading on existing home sales, released just after the open, sales rose to a record 6.95 million annual unit rate from an upwardly revised 6.81 million unit rate. Economists surveyed by Wall Street expected sales to fall to a 6.65 million unit annual rate.
Treasury prices fell, pushing the 10-year note yield up to 4.48 percent from 4.43 percent late Friday. Treasury prices and yields move in opposite directions. The dollar dipped versus the yen and euro.
In commodities markets, NYMEX light crude oil futures fell 32 cents to settle at $41.39 a barrel. COMEX gold fell 20 cents to settle at $390.30 an ounce.
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