Wall Street: Monday mid-session

By THIS IS MONEY
Updated:

 

US BLUE chips were lower at midday on Monday as investor worries about an interest-rate hike overshadowed positive quarterly earnings. But technology stocks rose, bouncing back from a slide in the past four sessions.

Fast-food chain McDonald's weighed on the Dow after the sudden death from an apparent heart attack of its chairman and chief executive, Jim Cantalupo. The company said President and Chief Operating Officer Charlie Bell was named chief executive officer.

Strong earnings from 3M, Wachovia and Eli Lilly were not enough to boost the Dow and the Standard & Poor's 500 index. Investors also waited for a flood of earnings later this week.

'Tomorrow is a huge day as far as earnings are concerned, so I think people aren't really going to jump in until they see the earnings,' said Todd Leone, head of listed trading at SG Cowen.

The Dow Jones industrial average fell 31.29 points to 10,420.68. The technology-laced Nasdaq Composite Index rose 11.16 points to 2,006.90.

Fears the Federal Reserve will raise interest rates sooner than had been previously expected to rein in inflation have weighed on the market as investors worry higher rates could put the brakes on the rebounding economy.

A report from the Conference Board on Monday said the US economy is gaining momentum and is on an upward trend that should boost second-quarter growth.

Fed Chairman Alan Greenspan is scheduled to testify on the economy on Wednesday before the congressional Joint Economic Committee.

In corporate news, McDonald's was the second biggest percentage loser on the Dow. Its shares fell 59 cents to $26.87 on the New York Stock Exchange. Cantalupo, 60, died of an apparent heart attack at the company's owner/operator convention in Orlando, Florida.

3M said first-quarter earnings rose, helped by the weaker dollar and strong demand for films that boost the brightness of displays in laptops, cellphones and flat-panel televisions.

3M, whose products range from Post-It notes and Scotch tape to drugs and roofing granules, fell 70 cents to $83.03.

Wachovia, the No. 4 US bank, said first-quarter profit rose 22%, more than analysts expected, as consumer lending and investment management fees rose and bad loans fell sharply. Its shares rose 32 cents to $45.07.

Eli Lilly said first-quarter earnings excluding costs from an acquisition rose sharply, beating forecasts, as new drugs helped push sales 17% higher. Shares of Eli Lilly rose 78 cents to $73.23.

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