US stocks dip

US investors intent on collecting profits from Friday’s big gains looked past a series of positive earnings reports today and sent blue chip stocks moderately lower. The falling dollar and rising price of oil contributed to the selling.

“This is the classic ’buy the rumour, sell the news’ market,” said Russ Koesterich, US equity strategist for State Street Corp. “A lot of the stocks that reported today have already had huge runs. They beat estimates, yes, but not so much that they’re being bid higher.”

Today’s selling could foreshadow the next few weeks, even as most analysts expect total quarterly earnings to rise 20% over last year, according to Michael Murphy, head trader at Wachovia Securities in Baltimore.

“I think the market’s still in an uptrend,” Murphy said. ”It’s just a little correction here, and it’s healthy.”

The Dow Jones industrial average closed down 71.85, or 0.7%, at 10,528.66.

Broader stock indicators were mixed. The Standard & Poor’s 500 index was down 1.06, or 0.1%, at 1,138.77, while the Nasdaq composite index closed up 7.51, or 0.4%, at 2,147.97.

While earnings were foremost on investors’ minds, the rising price of oil and a continuing slide in the dollar was a factor for some sellers, according to Scott Wren, equity strategist for AG Edwards & Sons.

Prices for light, sweet crude closed up 1.13 at 36.20 a barrel, the highest price since before the Iraq war began, on the New York Mercantile Exchange.

“The market is pretty close to fair value as is,” Wren said. “The dollar’s a little weaker, and you have oil that could hit 40 a barrel. That’s part of the reason why you’ll see some churn in the next few weeks along with the earnings.”

With the US earnings season now under way, General Motors reported profits of 1.47 per share, easily beating the 1.22 expected by Wall Street analysts. Its stock dropped 20 cents to close at 53.87.

Citigroup led the banking sector, posting profits 96% higher than a year ago and beating estimates by a penny. Citigroup was down 21 cents at 49.29.

Bank One, fresh from last week’s announcement of its merger with JP Morgan Chase, beat estimates by 7 cents per share despite a slight falloff in revenues. The company also announced it would purchase Circuit City Stores Inc’s credit card imprint. Bank One slipped 13 cents to 50.87.

Wells Fargo met analysts’ expectations with a 10% increase in fourth-quarter profits, and saw its stock rise 16 cents to 57.35. Ameritrade was up 1.83 at 17.20 as the online stock trader posted a 23% increase in quarterly profits, beating Wall Street estimates.

3M Co reported a 21% jump in profits from a year ago, beating analysts’ estimates by 1 cent. The manufacturer expects 2004 earnings to climb 14% over the previous year. 3M fell 5.07 to 80.41.

Johnson & Johnson beat expectations by 6 cents, reporting a 33% jump in its fourth-quarter profits despite a drop in sales for its top-selling drug, Procrit, a treatment for anaemia in cancer patients. J&J was up 1.05 at 51.50.

AT&T Wireless Services jumped up 40 cents to 10.39 as Cingular Wireless made an official bid for the company.

Advancing issues outpaced decliners by more than 3 to 2 on the New York Stock Exchange, where volume totalled 1.72 billion shares in moderate trading, up from the 1.69 billion traded at the same point on Friday.

The Russell 2000 index of smaller companies was up 7.25, or 1.2%, at 597.66.