Stocks end in red on earnings, economic data

@CNNMoneyInvest January 26, 2012: 4:20 PM ET
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NEW YORK (CNNMoney) -- U.S. stocks ended in the red Thursday as investors digested a mixed batch of corporate earnings results and remained cautious amid lackluster economic data and ongoing debt talks in Greece.

The Dow Jones industrial average (INDU) dipped 22 points, or 0.2%, the S&P 500 (SPX) lost 8 points, or 0.6%, and the Nasdaq (COMP) fell 13 points, or 0.5%.

The three major indexes started higher but gave up gains throughout the day. Disappointing data on the housing market forced investors to turn cautious, said Sameer Samana, an analyst at Wells Fargo Advisors.

New-home sales tumbled to a record low in 2011, according to government data released Thursday. Just 302,000 new homes were sold in 2011, 6.2% below 2010 and the lowest number of annual sales since the government started tracking home sales in 1963, the report showed.

"The fledgling recovery in housing market activity has yet to encompass the new homes market," noted Paul Diggle, property economist at Capital Economics. "The bottom line is that new-home sales are unlikely to rise significantly from their current ultra-low level while they are having to compete with deeply discounted foreclosures and short sales."

Fourth-quarter corporate results were also in the spotlight. Caterpillar (CAT, Fortune 500) and 3M (MMM, Fortune 500), which both posted better-than-expected earnings, were the best performers on the Dow, while Netflix (NFLX) was the biggest winner on the S&P 500 and the Nasdaq, with shares surging more than 20%.

Late Wednesday, the streaming video and DVD-by-mail company topped earnings and sales expectations. Netflix said it began to add customers again last quarter, after a series of blunders damaged its reputation with consumers and investors.

JCPenney (JCP, Fortune 500) and LSI (LSI) were also big gainers among the S&P 500, after the companies delivered upbeat forecasts for the first quarter of 2012.

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On the flip side, AT&T (T, Fortune 500) was the biggest laggard on the Dow after it reported quarterly earnings that fell short of forecasts. Disappointing results from SanDisk (SNDK, Fortune 500) also weighed on both the S&P 500 and the Nasdaq.

E*Trade (ETFC) was the worst performing stock in the S&P 500, after the company posted an unexpected fourth-quarter loss.

"Earnings continue to drive trading this week," said Michael Sheldon, chief investment strategist at RDM Financial Group. "Overall, results haven't been as strong as recent quarters, but they're holding up pretty well."

Investors are also still waiting for news out of Athens, where Greek officials are negotiating with private-sector creditors to reduce the country's debt burden.

"As long as the talks continue, a resolution is still a good possibility," Sheldon noted.

A stall or end to the talk, however, would be a major concern. Greece is in desperate need of an agreement to receive additional bailout funds from the European Union and International Monetary Fund. Without these funds, the country may not be able to make a €14 billion debt payment that's due March 20.

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Stocks finished higher Wednesday after the Federal Reserve pledged to keep interest rates near historic lows through late 2014 -- an extension from its original pledge to keep rates low through mid 2013 and its latest move to support the economic recovery.

Economy: Initial jobless claims for the week ended Jan. 21 rose to 377,000 from a revised 356,000 the week prior, according to the Labor Department. Economists had anticipated 375,000 claims, according to a survey of analysts by Briefing.com.

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Durable orders for the month of December rose 3%. Economists expected orders to have risen 2%.

The Conference Board's Leading Economic Indicators Index for December rose 0.4%. Economists were expecting the index to rise by 0.7%.

Companies: Nokia (NOK) shares climbed after the mobile phone maker posted a fourth-quarter loss of €1.1 billion, with sales down 21% compared to the same period a year earlier. Chief Executive Officer Stephen Elop said the Finnish company has sold more than 1 million Lumia devices, a smartphone using Microsoft (MST) Windows Phone software.

Currencies and commodities: The dollar fell against the euro, the British pound and the Japanese yen.

Oil for March delivery added 30 cents to settle at $99.70 a barrel.

Gold futures for February delivery gained $26.60 to settle at $1,726.70 an ounce.

Bonds: The price on the benchmark 10-year U.S. Treasury rose, pushing the yield down to 1.93% from 2.01% late Wednesday.

World markets: European stocks finished higher. Britain's FTSE 100 (UKX) gained 1.1%, the DAX (DAX) in Germany jumped 1.7% and France's CAC 40 (CAC40) added 1.3%.

Asian markets ended mixed. The Hang Seng (HSI) in Hong Kong added 1.6% while Japan's Nikkei (N225) fell 0.4%. Shanghai was closed for Chinese New Year. To top of page

Index Last Change % Change
Dow 16,408.54 -16.31 -0.10%
Nasdaq 4,095.52 9.29 0.23%
S&P 500 1,864.85 2.54 0.14%
Treasuries 2.72 0.08 3.19%
Data as of 1:35pm ET
Company Price Change % Change
Bank of America Corp... 16.15 0.00 0.00%
Facebook Inc 58.94 0.00 0.00%
General Electric Co 26.56 0.00 0.00%
Cisco Systems Inc 23.19 -0.02 -0.09%
Micron Technology In... 23.91 0.00 0.00%
Data as of Apr 17
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