Stocks Yo-Yo Amid Home-Sales Revival
Stocks had a topsy-turvy morning as investors digested a revival in pending-home sales and an earnings beat from Merck against some gloomy news out of the tech sector.
Pending-home sales rose 6.3 percent in December, the National Association of Realtors reported. That was the first increase since August.
SanDisk was the biggest drag on the Nasdaq and S&P after the flash memory-card maker warned that it would miss its revenue target. SanDisk also said it may issue a stock offering.
And Motorolapredicted a deeper-than-expected loss, suspended its dividend and said it's looking for a new finance chief after the unexplained departure of Paul Liska.
Meanwhile, Merck shares rose after the pharmaceutical giant swung to a profit of 87 cents a share, compared with a loss of 75 cents a share a year earlier, and backed its 2009 outlook.
Banks declined amid jitters over the so-called "bad bank" plan, with Bank of America leading Dow decliners.
Not even news that Citigroup plans to use $36.5 billion of bailout funds to boost lendingcould lift the sector out of its funk.
The near $900 billion stimulus package faces a "difficult next few days," according to President Obama, as the Democratic-controlled Senate debated the plan amid Republican opposition.
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Shares of BP were under pressure after the energy giant reported a $3.3 billion loss during the previous quarter. BP said lower energy prices caused the drop, which was well off the $4.4 billion profit the company posted the previous year.
Dow Chemical joined the chorus of dismal news, posting a $1.5 billion loss in the fourth quarter as sales dropped 23 percent to end one of the company's worst years.
Schering-Plough swung to a profit of 27 cents a share but the drug maker actually missed analysts' target of 30 cents a share, saying that slowing drug sales held revenue down. The company had lost $2.08 a share in the previous year.
Department-store operator Macy's announced plans to cut 7,000 employees and slash its dividend Monday.
Also, homebuilder DR Horton posted a narrowed loss of 20 cents per share that beat analyst expecations of a 52-cent per share loss.
TUESDAY: Auto sales; Earnings from Disney, Electronic Arts, Met Life and Yum Brands
WEDNESDAY: Weekly mortgage applications; ISM services index; weekly crude inventories; Earnings from Time Warner, Clorox, Kraft, Cisco, Prudential, Sunoco and Visa
THURSDAY: Chain-store sales; weekly jobless claims; factory orders; Earnings from Kellogg, MasterCard, Unilever, Hartford Financial, News Corp
FRIDAY: December jobs report; consumer credit
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