Stocks opened mixed as investors juggled an unexpected loss from Wachovia and an uptick in retail sales.
In economic news, retail sales climbed 0.2 percentlast month, pushed up by a jump in gasoline sales, the Commerce Department reported. Economists had expected the gauge to be unchanged from February. Sales at gasoline stations rose 1.1 percent; excluding gasoline sales, retail sales were flat, evidence that consumers are wary about spending.
Business inventories rose 0.6 percentto a seasonally adjusted $1.47 trillion in February, in line with Wall Street expectations, though sales dropped the most in more than a year, the Commerce Department said in a separate report.
Wachovia reported a net loss of 20 cents a share as credit problems soared. Excluding items, Wachovia's loss was 14 cents a share; analysts polled by Thomson Financial had expected a profit of 40 cents a share. Wachovia also said it would make additional job cuts reduce the size of its work force, cut its dividend and raise $7 billion in capital.
Earnings get into full swing this week, with several tech, financial and blue-chip companies reporting, including Intel , JPMorgan and Coca-Cola , among others. Analysts lowered their projection for Standard & Poor's 500 companies earnings to a 13.8 percent decline from the prior estimate of an 11.8 percent drop, according to Reuters estimates. (Click here for a full earnings calendar.)
Energy and tech are likely to produce the best earnings this season, but Michael Thompson, managing director of global research at Thomson Financial, told CNBC that investors need to be careful with tech as companies cut back on capital spending. He noted that tech earnings are now projected to have grown 7 percent during the quarter, half of the 14-percent estimate issued at the beginning of the quarter.
Even companies in consumer staples, seen as a good bet during an economic slump, are projected to show negative earnings growth, Thompson said.
"We're not at the bottom," Thompson said. "We expect this to continue for some time -- and it's not going to be an '08 fix," he said. Thompson said he'd even be cautious about the first half of '09. The intriguing part, Thompson said, is that "financials, we think ... are probably going to be the first guys that bounce back ... they've fallen the hardest."
General Electric ticked higher Monday after getting hammered on Friday following the conglomerate's first earnings miss in 10 years.
Delta and Northwest are expected to announce as early as Tuesday a merger that would create the world's biggest airline, but pilot-contract issues remained unresolved, people familiar with the talks said on Sunday.
American Airlines, owned by AMR , is back up and running on a full scheduleafter receiving clearance from federal-aviation officials on Saturday to return all of its 300 grounded jets back to the skies. All in all, American canceled nearly 3,300 flights last week.
Movie-rental chain Blockbuster said it hasoffered to buy Circuit City for $6 to $8 a share, or up to $1.3 billion. The bid for the electronics retailer represents up to a 105-percent premium on Circuit City shares.
And Manitowoc , a maker of cranes and restaurant equipment, has agreed to acquire British food-equipment maker Enodis for around 948 million pounds ($1.9 billion), the company said.
Earnings are due out later Monday from Charles Schwab.
TUESDAY: J&J, Intel, WaMu earnings; Empire State manufacturing; PPI
WEDNESDAY: BlackRock, Coke, JPMorgan, Wells Fargo, eBay, IBM earnings; mortgage applications; housing starts; CPI; industrial production; crude inventories; Beige Book; Fed's Yellen, Plosser speak
THURSDAY: Merrill Lynch, Nokia, Pfizer, Capital One, Google earnings; jobless claims; Philly Fed report; leading indicators; Fed's Kohn, Fisher speak
FRIDAY: Caterpillar, Citigroup, Honeywell, Xerox earnings; Fed's Lacker, Rosengren speak
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