By Corrie Driebusch
Stocks ended lower, with indexes giving back the day's gains in
the last hour of trading, amid concerns about the coming
corporate-earnings season.
Traders said the market is in a holding pattern ahead of
quarterly results, and that U.S. stocks are unlikely to make any
significant moves until investors have a better sense of how
companies performed in the first three months of the year.
First-quarter earnings are widely expected to decline due both
to a stronger dollar and its effect on profits at large
multinational companies and weaker commodity prices and their
impact on energy companies. In all, analysts expect earnings at
S&P 500 companies to fall 4.9% from a year earlier, according
to FactSet.
"The next market catalyst is going to be how earnings do against
expectations," said Brad McMillan, chief investment officer for
Commonwealth Financial Network, which manages about $97
billion.
On Tuesday, the Dow Jones Industrial Average slipped 5.43
points, or 0.03%, to 17875.42. The S&P 500 shed 4.29 points, or
0.2%, to 2076.33, and the Nasdaq Composite Index declined 7.08
points, or 0.1%, to 4910.23. The Dow industrials had been up by as
much as 102 points earlier in the day, but lost the gains in
late-afternoon trading.
Earnings season unofficially begins this week, when Alcoa
reports results after the stock market closes Wednesday. Meanwhile,
stock-trading volumes have been muted. Tuesday was no exception,
with 5.7 billion shares traded, the fewest since Jan. 2.
"Everyone's a little confused, a little cautious," said Seth
Setrakian, co-head of global equities at First New York Securities.
"They'd rather miss the next leg up than be caught overexposed.
There's a lot of cash on the sidelines."
In addition to earnings, investors are also keeping an eye on
labor and wage data, including Tuesday's job openings and labor
turnover survey, which is watched by the Federal Reserve. According
to the Labor Department survey, the number of job openings in the
U.S. climbed to the highest level in 14 years, surpassing five
million for the first time since January 2001. But the number of
Americans actually hired to fill jobs declined, as did the number
of people who voluntarily quit.
In commodity markets, crude-oil prices gained 3.5%, to $53.98 a
barrel, its highest close since Dec. 30. Gold lost 0.7%, to
$1,210.60 a troy ounce.
The yield on the 10-year Treasury note slipped to 1.893% from
1.902% on Monday. Yields fall as bond prices rise.
In corporate news, Informatica agreed to be taken private by
Permira Advisers LLC and the Canada Pension Plan Investment Board
in a deal valued at $5.3 billion, the largest U.S. leveraged buyout
this year. Shares rose $1.96, or 4.3%, to $47.79.
Energy logistics company Tesoro Logistics, a master limited
partnership created by refinery operator Tesoro, has agreed to buy
the remaining stake of QEP Midstream Partners LP in an exchange of
common units. QEP Midstream jumped 97 cents, or 6.2%, to 16.71.
Write to Corrie Driebusch at corrie.driebusch@wsj.com
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