Stocks look to fall after disappointing earnings

[July 22, 2008]  NEW YORK (AP) -- Wall Street looked to open sharply lower Tuesday after a dismal quarter from Wachovia Corp. heightened concerns about how corporate results will fare amid the ongoing credit crisis.

The nation's fourth-largest bank suffered more write-downs linked to its troubled mortgage business, and slashed its dividend for the second time this year. Wachovia, which is leaving the wholesale mortgage lending business, easily missed Wall Street projections.

Shares of the company plunged 11 percent in premarket trading, and added to an already jittery mood after disappointing results were released late Monday from blue chips American Express Co., Apple Inc. and Texas Instruments Inc.

Dow Jones industrial average futures fell 118, or 0.67 percent, to 11,347.

S&P 500 index futures fell 13.60, or 1.08 percent, to 1,248.00. Nasdaq 100 index futures shed 36.25, or 1.98 percent, to 1,791.25.

AmEx, one of the world's largest credit card lenders, said late Monday its second-quarter results fell 38 percent due to the weakening economy. The company, which missed projections, caters to more established borrowers with excellent credit.

Meanwhile, Apple said fiscal third-quarter earnings rose 31 percent to beat expectations, but issued soft guidance for the current quarter. The maker of iPods and iMac computers is expected to have lower margins going forward because of the introduction of new products.

Texas Instruments reported its profit fell 4 percent, missing forecasts. The chip maker blamed some of the erosion on sagging sales from a slowdown in orders last month.

The results increased concern that analysts' earnings estimates might be too high. So far, the growth rate of Standard & Poor's 500 index companies reporting has fallen to negative 14.7 percent, according to Thomson Financial. The market had grown optimistic last week after better-than-expected earnings from financial companies, so Monday's reports were particularly sobering.

Some 158 members of the S&P 500 were expected to report this week, the busiest since second-quarter earnings season began in earnest earlier this month. Results on Tuesday are expected from DuPont, Caterpillar Inc., Yahoo Inc. and Washington Mutual Inc.

The expected decline in stocks sent investors into the relative safety of government bonds. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 4.01 percent from 4.04 percent from late Monday.

The dollar was mixed against other major currencies, while gold prices rose.

Oil prices held steady on expectations Tropical Storm Dolly won't disrupt oil operations in the Gulf of Mexico. A barrel of light sweet crude rose 1 cent to $131.05 in premarket electronic trading on the New York Mercantile Exchange.

There was little in the way of economic news expected during the session. Philadelphia Federal Reserve President Charles Plosser is scheduled to speak.

Japan's Nikkei stock average rose 2.98 percent. In morning trading, Britain's FTSE 100 fell 1.71 percent, Germany's DAX index dropped 1.03 percent, and France's CAC-40 fell 1.53 percent.

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[Associated Press; By JOE BEL BRUNO]

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