Down day on Wall Street
Stocks give up midday recovery attempt and resume the decline on Wachovia and worries about first-quarter earnings.
NEW YORK (CNNMoney.com) -- Stocks slipped Monday afternoon, as worries about Wachovia's earnings and the outlook for corporate profits overshadowed any relief about the better-than-expected March retail sales report.
The Dow Jones industrial average (INDU) lost 0.2%. The broader Standard & Poor's 500 (SPX) index lost 0.3% and the Nasdaq composite (COMP) lost 0.6%.
Stocks slumped Friday after GE's weaker-than-expected profit report magnified fears about the outlook for corporate earnings amid the economic slowdown. Such concerns were revived Monday by Wachovia at the start of a busy week for bank earnings.
"GE and Wachovia have kind of set the tone for the earnings reporting period," said Peter Cardillo, chief market economist at Avalon Partners.
However, Wachovia's news was having less of an effect than GE's did Friday, because a weak earnings reporting period has already been anticipated by investors, he said.
A better-than-expected retail sales report also helped take the edge off the earnings news Monday and in the afternoon, stocks briefly posted gains.
After slumping on and off through the first quarter, the stock market seems to have found some stability of late. Yet, the market remains vulnerable to day-to-day price swings, even as the tone improves, said Mark Travis, president and CEO at Intrepid Capital Funds.
"I expect the volatility to continue for some time, but I also think there are some opportunities here, with the market down more than 15% off the highs," he said.
Tuesday morning brings quarterly earnings from Johnson & Johnson (JNJ, Fortune 500) and others. The March Producer Price index (PPI) and the April NY Empire State index are the two big economic reports on tap.
Wachovia. Wachovia (WB, Fortune 500) reported a quarterly loss of 20 cents per share versus a profit of $1.20 a year earlier. Analysts surveyed by Thomson/First Call thought it would report a profit of 40 cents per share. The company also cut its quarterly dividend and said it will raise $7 billion through a share sale. The stock fell 8%.
A variety of financial stocks slumped on the news, including Citigroup (C, Fortune 500), Bank of America (BAC, Fortune 500) and Washington Mutual (WM, Fortune 500).
Retail sales. Sales were up in March, although rising gas prices and the slumping economy continued to take a toll. Overall sales gained 0.2%, versus a decline in the previous month and above economists' forecasts. Without both auto and gas sales, retail sales were up just 0.1%. (Full story).
Merger news. Blockbuster (BBI, Fortune 500) said it will take its unsolicited bid for Circuit City (CC, Fortune 500) to shareholders after failing to make progress with the company. Blockbuster is offering over $1 billion in an all-cash bid. Blockbuster shares lost 13%, while Circuit City shares jumped 27%.
Delta Air Lines (DAL, Fortune 500) and Northwest (NWA, Fortune 500) are reportedly close to announcing a deal after months of speculation.
U.S.-based Manitowoc (MTW), a diversified manufacturer, is buying food equipment maker Endodis for $2.1 billion. Endodis is listed in the U.K., but operates out of Tampa, Fla.
Other movers. Oil services stocks rose as the price of the raw commodity rebounded above $111 a barrel.
Gainers included Exxon Mobil (XOM, Fortune 500), Sunoco (SUN, Fortune 500) and ConocoPhillips (COP, Fortune 500).
Market breadth was negative. On the New York Stock Exchange, losers topped winners 3 to 2 on volume of 1.17 billion shares. On the Nasdaq, decliners beat advancers 9 to 5 as 1.64 billion shares changed hands.
Commodity prices. U.S. light crude oil for May delivery rose $1.62 to settle at $111.76 a barrel on the New York Mercantile Exchange.
COMEX gold for June delivery rose $1.70 to settle at $928.70 an ounce.
Other markets. The dollar fell versus the euro and the yen.
Treasury prices fell, raising the yield on the benchmark 10-year note to 3.51% from 3.47% late Friday. Bond prices and yields move in opposite directions. 
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