By Donna Kardos Yesalavich U.S. stocks opened slightly lower Tuesday as a disappointing first-quarter report from Alcoa and wider-than-expected trade deficit dampened sentiment, pushing the Dow Jones Industrial Average back below the 11000 level. The Dow Jones Industrial Average (DJI) was down 20 points, or 0.2%, at 10986 in early trading. Alcoa (AA) was the measure's worst performer with a drop of 2.8%. The aluminum giant reported a narrower quarterly loss and held out hopes for improvement in the year ahead, striking a positive note as the first major company out of the gate to report first-quarter earnings. But its earnings excluding items merely met analysts' estimates while revenue came in weaker than expected. UBS cut its investment rating on the stock to neutral from buy following the report. Intel (INTC) is the next heavyweight to report, with the world's largest chip maker slated to post its first-quarter numbers after the close of trade Tuesday. Ahead of the report, Intel edged up 0.2%, making it the Dow's best performer. The Nasdaq Composite (RIXF) slipped 0.1%. The Standard & Poor's 500 index (SPX) declined 0.2%, with the materials and energy sectors leading its decline. Tuesday's small drop in stocks comes after the Dow on Monday closed above 11000, something it hadn't achieved since the financial system began teetering nearly 19 months ago. By inching past the milestone, the Dow continued what amounts to a stealth rally in a market characterized by below-average trading volume and small daily moves. The market is now looking to see if the S&P 500 can climb above the key 1200 mark. It closed Monday at 1196.48, its highest close since Sept. 26, 2008. However, the measure appeared unlikely to reach that level Tuesday, as investors were disappointed by Alcoa's report and data that showed the U.S. trade deficit rose more than expected in February. The wider U.S. trade deficit came as soaring imports of consumer goods and industrial supplies outweighed the impact of oil imports falling to their lowest level in 11 years. The deficit rose 7.4% to $39.70 billion in February, higher than the $39 billion shortfall Wall Street was expecting. Also hurting sentiment, small business owners reported little pick up in their sales or confidence in March, according to a report released Tuesday. The Small Business Optimism Index lost 1.2 points to 86.8 in March, according to the National Federation of Independent Business. Meanwhile, data from the Labor Department showed prices of goods imported into the United States rose by a monthly 0.7% in March, after a revised 0.2% drop in February. Economists had expected a 1.0% increase. While the rise in U.S. import prices was led by higher oil prices, broader price measures in the world's largest economy show that inflation remains tame. The dollar weakened against the euro as the Greek government's sale of 1.56 billion of Treasury bills Tuesday met with strong demand and reassured investors that it can meet its short-term financial needs. But the Greek government still finds itself having to pay very high interest rates, which will have to fall rapidly in future bond sales for plans to cut the budget deficit to remain on track. The dollar was also weaker against the yen Tuesday. Crude-oil futures fell below $84 a barrel, while gold futures also slipped. Treasurys edged up, putting the 10-year note at a yield of 3.81%. Among stocks in focus, CF Industries (CF) slipped 2.5% after the fertilizer company predicted first-quarter sales below Wall Street's expectations because of declining sales in its nitrogen and phosphate segments. The company also said it plans to sell at least 10.8 million shares and $1.6 billion in debt to raise funds to repay borrowings under its $1.75 billion senior secured bridge facility. Talbots (TLB) climbed 6.3%. The women's apparel retailer swung to a profit in its fiscal fourth quarter and forecast revenue for the new year slightly above analysts' views. Its first-quarter revenue outlook also topped expectations.
