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US stocks fall for second day

Jan 09 2013 07:30 AFP

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New York - US stocks sank for a second day on Tuesday as the fourth quarter earnings season opened and as confidence slipped after last week's big gains.

At the close the Dow Jones Industrial Average was down 55.44 points at 13,328.85.

The broad-based S&P 500 fell 4.74 to 1,457.15, while the tech-heavy Nasdaq Composite lost 7.00 at 3,091.81.

The fall paralleled the trend around the world, with markets in Asia and Europe mostly finishing modestly lower in the absence of much positive news.

Wariness held sway as the fourth quarter earnings season was opening Tuesday, with Alcoa releasing its results after the closing bell.

Alcoa turned in income of $242m, up from a loss a year earlier, despite falling aluminum prices.

The shares traded flat at $9.10 during the day and pushed up 1.7% in after hours trade.

Monsanto shares surged 2.7% after it reported a 169% rise in profit for its fiscal first quarter, ended November 30, on strong genetically modified corn seed sales in the United States and Latin America.

Biotech and pharmaceutical company Celgene gained 6.6% after raising its guidance for 2012 income and earning an upgrade from analysts at RBC Capital markets.

Retailer Sears Holdings sank 6.4% after the company announced that chief executive Lou D'Ambrosio, whom investors had hoped would engineer a turnaround, was leaving due to family illness. Edward Lampert, a hedge fund billionaire, will replace him.

Boeing shares fell 2.6% as attention focused on a fire that broke out in one of its new 787 Dreamliner aircraft as it sat empty at a Boston airport on Monday.

Verizon (-2.4%) and AT&T (-1.7%) fell on worries that smaller rival T-Mobile could mount a potent challenge to their business model by ending subsidies on smartphones sold to new subscribers.

Fast food franchiser Yum Brands, which controls Pizza Hut, Taco Bell and Kentucky Fried Chicken, lost 4.4% after divulging that its China business, the source of strong growth in recent years, would be hit in fourth-quarter reporting by a slowdown in KFC sales.

Bond prices gained. The yield on the 10-year US Treasury fell to 1.87% from 1.91% late on Monday, while the 30-year moved down to 3.07% from 3.10%. Bond prices and yields move inversely.

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