By Donna Kardos Yesalavich
U.S. stocks opened broadly lower Tuesday, pushing the Dow Jones
Industrial Average below the key 11,000 level as worries over
euro-zone debt returned.
The Dow (DJI) dropped 158 points, or 1.4%, to 10,994, in early
trading. That wipes out Monday's gain of about 143 points. The
measure's most economically sensitive components, which had led
Monday's rally, reversed Tuesday to lead its declines. Alcoa (AA)
fell 4%, Caterpillar dropped 3.4% and Walt Disney fell 2.2%.
Just a few Dow components were in the black, led by Merck (MRK),
which climbed 2.1%, and Pfizer (PFE), which climbed 1.5%. The
companies reported declines in first-quarter profits as both drug
makers incurred costs digesting large acquisitions and felt the
early effects of the U.S. health-care overhaul. Both companies'
sales and earnings excluding certain costs, however, exceeded Wall
Street expectations.
The Nasdaq Composite (RIXF) slipped 2.3%. The Standard &
Poor's 500 (SPX) index declined 1.6%. All its sectors were in the
red, led by industrials, which had several earnings
disappointments. Among them, Pitney Bowes posted a 24% drop in
first-quarter profit on lower sales. The mail and
document-management company's earnings exceeded Wall Street's
expectations, though revenue fell short. The stock declined
2.1%.
Tuesday's broad declines in U.S. stocks came as the euro
(CUR_EURUSD) fell to a 12-month low against the dollar on
skepticism over the Greek government's ability to carry out harsh
austerity measures required by its aid package. Although the German
government negotiated to provide the lion's share of the European
Union contribution to Greece, there is little assurance that
Chancellor Angela Merkel will get the electoral backing for the
bailout. Not helping, data from Germany showed retail sales fell
2.4% in March.
The U.S. Dollar Index (DXY), reflecting the U.S. currency
against a basket of six other currencies, jumped 1%. Treasurys
rose, pushing the yield on the 10-year note down to 3.61%.
Crude-oil futures fell below $84 a barrel while gold futures edged
higher.
Among stocks in focus, Apple (AAPL) shares fell 1.9%. U.S.
antitrust enforcers are taking a keen interest in recent changes
that the company made to its licensing agreement with iPhone
application developers and are likely to open a preliminary
investigation into whether the company's actions stifle competition
in mobile devices, The Wall Street Journal reported, citing people
familiar with the situation.
Interactive Data (IDC) rose 0.7% after the company reached a
deal to be purchased by private-equity groups Silver Lake Partners
and Warburg Pincus for $3.4 billion. Majority owner Pearson (PSO)
will receive $2 billion before tax from the deal. Its shares slid
4.5%.
Still to come, data on pending home sales and factory orders are
due at 10 a.m. EDT.