cnn report

Dow snaps losing streak
Blue chips edge higher, helped by McDonald's, but geopolitical concerns weigh on broader market.
By Jessica Seid and Alexandra Twin, CNNMoney.com staff writers
July 17 2006: 5:11 PM EDT


NEW YORK (CNNMoney.com) -- Blue chips posted modest gains Monday after three straight days of declines as stronger than expected earnings from McDonald's helped sentiment despite persistent worries about the Mideast.

The Dow Jones Industrial average (up 8.01 to 10,747.36, Charts) added 0.1 percent.




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The broader Standard & Poor's 500 (down 1.71 to 1,234.49, Charts) index slipped 0.1 percent, while the tech-heavy Nasdaq composite (up 0.37 to 2,037.72, Charts) was flat.

Earlier in the session, all three major gauges seesawed in narrow trading as investors showed caution after last week's drubbing from record oil prices and violence in the Middle East.

"The markets continue to monitor the headlines out of the Middle East and even though we have lower commodity prices, a lack of buyers is keeping the market captive," said Peter Cardillo, chief market analyst at S.W. Bach & Co.

Oil prices backed off record highs hit last week but remained above $75 a barrel, while fighting between Israel and Lebanon's Hezbollah showed no sign of abating.

Cardillo said investors weren't paying much attention to corporate profit reports or economic news at the moment, although "the one thing that could get investors attention would be the testimony from Bernanke on Thursday."

"Other than that it's stop and go," he said.

What moved?
Among the 30 stocks in the Dow, 16 rose while 14 fell.

Dow component Citigroup (down $1.18 to $46.40, Charts) reported quarterly earnings and revenue that rose from a year earlier. But the earnings and revenue missed estimates, and that sent the stock down 2.5 percent.

Countering that was strength in fellow Dow stock McDonald's (up $1.68 to $34.72, Charts), which gained 5 percent after the fast-food retailer said that second-quarter earnings would beat estimates and reported strong sales for June.

Shares of Mattel (up $1.72 to $17.60, Charts) jumped 11 percent after the toy maker reported a higher than expected quarterly profit.

Apple Computer (up $1.70 to $52.37, Charts) added 3.5 percent after an article in financial weekly Barron's said that the stock could rebound in the next year.

And after the closing bell, Microsoft (up $0.19 to $22.48, Charts) seesawed after the software maker said that starting in fiscal 2007, it will report its financial performance based on five businesses, instead of seven operating divisions.

On deck, Coca-Cola (up $0.05 to $42.70, Charts), Merrill Lynch (up $0.78 to $68.27, Charts), IBM (up $0.13 to $73.70, Charts) and Yahoo! (down $0.24 to $31.84, Charts) all report earnings Tuesday.

Market breadth was negative. On the New York Stock Exchange, losers beat winners ten to seven on volume of 1.5 billion shares. On the Nasdaq, decliners topped advancers three to two as 1.6 billion shares changed hands.

Oil and gold prices and stocks fall
Light crude oil for August delivery slumped $1.73 to $75.30 a barrel on the New York Mercantile Exchange. On Friday, oil settled at a record high of $77.03 a barrel, after hitting a trading high of $78.40.

Monday's dip sent oil stocks lower, with the Amex Oil (down 32.88 to 1,144.31, Charts) index down nearly 3 percent.

COMEX gold for August delivery slumped $16.10 to $651.90 an ounce.

Gold and silver stocks slumped too, with the commodity price and underlying stocks suffering profit taking after last week's run-up.

The Amex Gold Bugs (down $12.13 to $328.05, Charts) index fell more than 3 percent, while the iShares Silver Trust (down $6.02 to $108.97, Charts) fell 5 percent.

Treasury prices were little changed despite a stronger than expected industrial production report, leaving the yield on the benchmark 10-year note around 5.06 percent.

Output at U.S. factories, mines and utilities rose by a bigger than anticipated 0.8 percent in June.

But a key regional reading on manufacturing missed estimates. The NY Empire State index fell to 15.6 in July from a prior reading of 29. Economists surveyed by Briefing.com thought it would fall to 21.8.

June economic reports