Stocks in early struggle

Wall Street manages a mixed start as investors consider Merck's earnings and gear up for auto sales.

EMAIL  |   PRINT  |   SHARE  |   RSS
google my aol my msn my yahoo! netvibes
Paste this link into your favorite RSS desktop reader
See all RSS FEEDS (close)
By staff

How will the economic stimulus package help your job situation?
  • It won't make any difference
  • It will help me find a job
  • It will help me keep my job

NEW YORK( -- Better-than-expected earnings from Merck gave a lift to the blue chips Tuesday morning, but the broader market was mixed ahead of the release of the January auto sales and pending home sales reports.

The Dow Jones industrial average (INDU) rose 15 points, or 0.1%, in the early going.

The Standard & Poor's 500 (SPX) index was little changed. The Nasdaq composite (COMP) lost 4 points, or 0.2%.

Peter Cardillo, chief market economist for Avalon Partners, said that investors appeared to be reacting to Merck's relatively strong earnings.

Merck (MRK, Fortune 500) reported net income of more than $1.6 billion for the fourth-quarter, compared to a loss in the year-earlier quarter. The drugmaker announced earnings of 78 cents per share, excluding charges related to restructuring. Analysts had expected Merck to report earnings of 74 cents per share, according to a survey from Thomson Reuters. Shares gained 3.3% Tuesday morning.

This follows mixed trading on Monday, when investors were focused on the Senate debate over the $885 billion stimulus package. The debate continues Tuesday.

"The moving factor today, initially, will be earnings and car sales and then, as we move through the rest of the day, the rhetoric out of Washington," said Cardillo.

Corporate results: Dow Chemical (DOW, Fortune 500) reported a loss of $1.55 billion for the fourth quarter, or a loss of $1.68 per share. The company blamed nearly $1 billion in charges stemming from restructuring costs, the impact of Hurricanes Gustav and Ike, and other factors. Shares were little changed.

Motorola (MOT, Fortune 500) reported a fourth-quarter net loss of $3.6 billion, or $1.57 per share, and said it was suspending its dividend. The company said it would cut $1.5 billion in costs this year, and appointed an acting chief financial officer. Shares fell 8.5% in early trading.

UPS (UPS, Fortune 500) reported adjusted diluted earnings of 83 cents per share for the fourth quarter, down 22% from the year-ago quarter. Chief Executive Scott Davis blamed "a severe decline in economic activity around the world" resulting in "sharply lower package and freight volume for UPS." Shares gained 3.5% Tuesday morning.

Economy: The National Association of Realtors' pending home sales index for December is due after the opening bell. Auto sales, which are expected to plunge, are due beginning at midday.

World markets: Stocks closed lower in Asia, despite new measures from the governments of Australia and Japan to boost economic growth. European indexes rose in the afternoon.

Oil and money: Oil prices rose 46 cents a barrel to $40.54 on the New York Mercantile Exchange. The dollar rose versus the yen and the British pound, but fell against the euro. To top of page

They're hiring!These Fortune 100 employers have at least 350 openings each. What are they looking for in a new hire? More
If the Fortune 500 were a country...It would be the world's second-biggest economy. See how big companies' sales stack up against GDP over the past decade. More
Sponsored By:
More Galleries
5 radical technologies that will change how you get to work From Uber's flying cars to the Hyperloop, these are some of the neatest transportation concepts in the works today. More
Royal wedding: How much will it cost? Meghan Markle's wedding to Prince Harry could cost millions once security is included in the bill. See how the costs break down. More
Robot co-workers? 7 cool technologies changing the way we work Experts believe humans and machines will work much more closely together. More