Stocks don't look record-bound
Hope for Dow hitting 12,000 fades amid inflation concerns; tech earnings on deck.
NEW YORK (CNNMoney.com) -- Stocks remained lower Tuesday, the mood dampened by renewed inflation concerns, as investors await a slew of tech earnings expected after the bell.
The Dow (down 44.67 to 11,935.93, Charts) fell 0.2 percent with about an hour left in trade.
All three gauges moved off lows hit earlier in the session.
The decline tempered hopes that the Dow would cross the 12,000 mark, which it came within three points of hitting Monday, before pulling back a bit to end around 11,980. That number was still another record close, unadjusted for inflation.
The Dow's losses were broad-based, with 22 of the index's 30 components declining.
But if the day's trading is any indication, investors are bracing for the worst.
The AMEX networking index fell over 2 percent and the Goldman Sachs Internet Index lost about 1 percent.
"There has been some concerns and whispers that the numbers might not look too good," said Larry Peruzzi, a stock trader at The Boston Company Asset Management.
Tuesday morning the Producer Price Index, a measure of prices on the wholesale level, fell far more than expected, mostly due to tumbling gasoline prices.
The index posted a drop of 1.3 percent, according to the Labor Department. Economists expected a decline of 0.7 percent.
But Wall Street focused more on the so-called core PPI, which strips out often volatile food and energy prices. That reading rose 0.6 percent in September. Economists had forecast only a 0.2 percent rise in the core PPI.
"Although the earnings are reasonable, I think the market is looking at Fed policy," said Subodh Kumar, chief U.S. investment strategist at CIBC World Markets. "Part of the thinking was that the Fed might ease soon. But now we've got some hard numbers that say they can't afford to do that."
Another morning economic report also raised concern. The government said output at mines, factories and utilities fell by a sharp 0.6 percent in September. Analysts were looking for output to be flat.
The troubling economic news overshadowed positive earnings reports that came earlier in the morning.
Conglomerate United Technologies (down $1.44 to $65.35, Charts) reported earnings per share of 99 cents, 3 cents better than estimates. It also raised its full-year earnings guidance. Nonetheless, its shares declined over 2 percent.
And Eli Lilly (down $0.12 to $57.54, Charts) is buying ICOS (up $4.34 to $31.46, Charts), the maker of the erectile dysfunction drug Cialis for $2.1 billion in cash. The $32 per share purchase price is an 18 percent premium from Monday's close.
Geopolitical concerns also weighed on the market.
Officials in South Korea and Japan said there were signs that North Korea could be preparing for a second nuclear test.
Stocks closed mostly lower in Asia despite the North Korean nuclear concerns, as Japan's Nikkei retreated from a five-month high and stocks in South Korea were lower, although Hong Kong's Hang Seng closed narrowly higher. Major gauges in Europe finished sharply lower.
U.S. light crude lost $1.01 to settle at $58.93 a barrel on the New York Mercantile Exchange.
COMEX gold fell $5 to $593.50 an ounce.
Market breadth was negative. On the New York Stock Exchange, losers beat winners more than two to one on volume of 1.1 billion shares. On the Nasdaq, decliners topped advancers two to one volume of 1.7 billion shares.