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Stocks drift lower after Johnson & Johnson report

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[October 13, 2009]  NEW YORK (AP) -- Stocks fell slightly in early trading Tuesday after a mixed report from Johnson & Johnson.

The health care products maker, the first among a number of key companies this week to issue quarterly results, said its sales fell 5 percent in the third quarter, more than expected. However, its profit rose 1 percent, narrowly beating expectations.

Investors want to see signs that businesses and consumers are picking up their spending and that companies have been able to drive higher profits through revenue growth, not just through deep cost cuts, which helped boost income in the second quarter.

"They're not telling us the hoped for better-than-expected sales," said Linda Duessel, equity market strategist at Federated Investors. "We want sales growth now."

Later Tuesday, investors will also get reports from tech giant Intel Corp. and railroad operator CSX Corp.

A drop in the dollar sent commodity-related stocks higher, helping to mitigate the market's losses.

Meanwhile, technology shares rose slightly on news that Cisco Systems Inc. agreed to buy Starent Networks Corp. for $2.9 billion.

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Investors around the globe have sent stocks higher in recent days on hopes that third-quarter earnings reports, which begin in earnest this week, will exceed expectations and validate the market's growing belief that the economy is on the mend.

In early trading, the Dow Jones industrial average fell 33.71, or 0.3 percent, to 9,852.09. The Standard & Poor's 500 index fell 4.77, or 0.4 percent, to 1,071.42, while the Nasdaq composite index rose 0.81, or 0.04 percent, to 2,139.95.

[Associated Press; By SARA LEPRO]

Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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