Stocks declined amid continued worries over the Fed Reserve's plans to stimulate the economy and a somewhat mixed batch of corporate earnings on Thursday, including a slimmer proift forecast from 3M.
The Dow Jones Industrial Average fell more than 55 points, after rising at the start of the trading session, and after slipping the previous dayafter news the Federal Reserve may not provide as much stimulus to the economy as had been expected.
3M , Caterpillar and Cisco fell, while American Express and Pfizer rose.
The S&P 500 and the Nasdaq both fell. The CBOE Volatility Index, widely considered the best gauge of fear in the market, rose above 21.
Telecom, health care and energy sectors rose, while industrials fell.
Traders have expected stocks to largely hold steady ahead of the Fed's policy setting meeting next week, Nov. 2-3. Market participants had been expecting the Fed to buy anywhere from $500 billion to $1 trillion in long-term assets, in a strategy known as quantative easing.
If the Fed decides to buy fewer than $500 billion, stocks would be likely to sell off, said Marc Pado, market strategist at Cantor Fitzgerald.
"The dollar would rally, and that would reverse what we’ve seen here lately," he said.
The dollar was, in fact, lower against a basket of currencies on Thursday, after rising the past two days. Stocks had been moving inversely to stocks.
A spate of earnings were released early Thursday, delivering mixed news to the markets. However, with about half of S&P 500 companies reporting so far, 85 percent have matched or beaten estimates, according to Thomson Reuters.
3M sank nearly 7 percent afterreleasing a disappointing outlook, despite reporting profits and revenues that beat expectations.
Shares of Dow component Exxon Mobil were slightly higher after the energy giant reported strong profits, but revenues that fell short of expectations. Earlier Royal Dutch Shell beat analyst forecasts in London with an 18 percent jump in third-quarter profit, sending the oil giant's shares higher.
Meanwhile, the price of oil rose, giving a boost also to BP and Chevron, although ConocoPhillips fell.
Shares of Dow Chemical , meanwhile, rose after the largest U.S. chemical maker posted a better-than-expected quarterly profit due to strong sales of chlorine, basic plastic, and lubricants.
On the technology front, Motorolarose nearly 5 percent after the mobile-phone maker, which plans to split into two companies next year, posted an operating profit of $3 million, versus a loss of $183 million a year ago, thanks to sales of smartphones based on Google's Android software.
Meanwhile, shares of Research in Motion fell 3 percent after Oppenheimer cut the stock to "perform" from "outperform," citing increasing competition for the maker of smartphones.
Symantec shares jumped despite a fall in profit, as its results were better than the security-software company had forecasted. Several brokerages raised their price target for the company.
Meanwhile Akamai Technologies also rose after several brokerages raised their price targets for the computer software company after Akamai reported a 21 percent jump in profits on Wednesday. And Flextronics' shares soared after reporting strong sales growth and fewer charges.
Teradyne slid after the maker of semiconductor testing equipment delivered a weak forecast for the current quarter.
Visa shares declined Thursday as the credit-card issuer's results, reported on Wednesday after the bell, beat expectations, but not as much as investors had expected. Investors were also concerned about new regulations affecting debt cards. S&P Equity cut its rating for Visa to "buy" from "strong buy," and a couple brokerages cut their price target for the company.
Shares of rival MasterCard also fell.
AutoNation's third-quarter earnings missed expectations, and the auto retailer projected future auto sales will continue to be slow.
Shares of Skechers plunged after reporting disappointing third quarter earnings, including news of a 70 percent rise in inventory. Susquehanna cut the shoe retailer's price target to $23 from $27, and lowered its rating to to "neutral." Wedbush also cut Skechers to "neutral" from "outperform."
Eastman Kodak's shares surged to the top of the S&P 500 after beating forecasts on earnings from the licensing of its technology to phone and camera makers.
Colgate-Palmolive's shares slipped after the consumer products company issued a cautious view for 2011.
In merger and acquisition news, Sanofi-Aventissaid it would not raise its $18.5 billion hostile bid for Genzyme , after posting better-than-expected quarterly earnings.
On the financial front, Wells Fargo was criticized for how it handled foreclosures, and said it will re-file documents on 55,000 cases.
In economic news, initial claims for state unemployment benefits fell 21,000 to 434,000, the lowest level since early July, according to the Labor Department.
There has been much speculation over the past two weeks on whether the Fed will start an aggressive second course of money printing or on whether it will prefer to buy assets gradually. In one of the latest comments on the issue, well-known Goldman Sachs strategist Abby Joseph Cohen said on CNBC Wednesday that the Fed likely will begin its latest round of monetary easing by buying $500 billion of Treasury debt and ultimately as much as $1 trillion.
THURSDAY: Natural gas inventories, 7-year note auction; after-the-bell earnings from Microsoft and MetLife.
FRIDAY: GDP, employment cost index, Chicago PMI, consumer sentiment, farm prices; before-the-bell earnings from Chevron, Merck and Cigna.
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