US stocks mixed ahead of second-quarter earnings

Stocks in the US finished an uneasy session mixed today as investors grew nervous ahead of the second-quarter earnings season. Weakness in the technology sector dragged on the Nasdaq composite index.

Expectations for solid quarterly results helped the market to an early advance, but the enthusiasm waned throughout the session, prompting some traders to lock in profits. Dow Jones industrials component Alcoa – the first major US company to report – sagged after releasing its results after the close of trading.

While analysts forecast another round of double-digit profit growth from companies in the Standard & Poor’s 500 index, some said strong results may have already been priced into the market and that lingering confusion about interest rates and economic growth were keeping stocks from gaining.

“The nice thing about earnings is that they’re probably going to be higher,” said Ed Peters, chief investment officer for PanAgora Asset Management. “Unfortunately, that’s old news. Good earnings have already been discounted - people are looking at what’s going to happen next.”

Several acquisitions were giving stocks some support. Kraft Foods agreed to buy the Spanish and Portuguese units of United Biscuits for 1.07 billion dollars and Kimco Realty. acquired Pan Pacific Retail Properties for 2.9 billion dollars.

The Dow added 12.88, or 0.12%, to 11,103.55, after gaining as much as 84 points earlier.

Broader stock indicators were mixed. The S&P 500 rose 1.86, or 0.15%, to 1,267.34, and the Nasdaq dropped 13.13, or 0.62%, to 2,116.93.

Bonds were flat after last week’s rally, with the yield on the 10-year Treasury note unchanged at 5.13% from late Friday. The US dollar was little changed against other major currencies, and gold prices tumbled to about 625 dollars an ounce.

Wall Street’s persistent concerns about the economy squelched excitement over earnings. Although companies were largely expected to show upbeat results, recent profit warnings from Advanced Micro Devices, 3M and EMC sparked fears that higher interest rates have contained inflation but are hurting economic growth.

“The numbers look good, but enough people are on edge after 3M and EMC,” said John Caldwell, chief investment strategist for McDonald Financial Group.

Crude futures fell as energy traders took profits from the recent surge in prices, but worries about Iran and motor fuel demand were expected to support the market. A barrel of light crude lost 48 cents to 73.61dollars on the New York Mercantile Exchange.

A bigger-than-forecast rise in wholesale inventories last month fed hopes that easing demand will help cool the economy. While the 0.8% increase was greater than economists’ predictions of 0.5%, that was sharply less than the 1.3% gain in April.

Aluminum producer Alcoa said soaring metal prices helped its profit swell 62%, but quarterly revenue still missed Wall Street expectations. Shares ended the regular session 14 cents lower at 33.41dollars, and lost another 94 cents in after-hours trading.

Other companies reporting this week include PepsiCo, which posts its results Thursday orning. Earnings from Dow component General Electric Co. are due Friday morning.

Profit warnings from Kronos, EMC and AMD pulled tech stocks lower. Kronos sank 5.16dollars to 29.46dollars, EMC lost 77 cents to 10.41dollars and AMD slumped 1.05dollars to 22.51dollars.

Along with the purchase of United Biscuits’ Iberian businesses, Kraft is also buying the rights to Nabisco trademarks in the European Union, Eastern Europe, the Middle East and Africa. Kraft added a penny to 30.21dollars.

Shopping centre operator Kimco will also assume about 1.1 billion dollars of debt from Pan Pacific, which owns about 140 retail properties. Kimco rose 54 cents to 37.41dollars and Pan Pacific slid 65 cents to 69.35dollars.

WPS Resources said it will take over Peoples Energy for 1.52 billion dollars in stock. WPS rose 53 cents to 48.51dollars, and Peoples Energy gained 42 cents to 39.09dollars.

Advancing issues led decliners by about 5 to 3 on the New York Stock Exchange, where volume of 1.29 billion shares trailed the 1.43 billion shares that changed hands Friday.

The Russell 2000 index of smaller companies slipped 0.22, or 0.03%, to 709.08.