Stocks fall as earnings jitters increase

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July 10, 2009

Anonymous The Salem News Fri Jul 10, 2009, 10:15 AM EDT

NEW YORK (AP) — Falling oil prices and unease over corporate earnings put pressure on stocks Friday.

Stocks are mostly lower in early trading, as investors shed positions in energy, utilities and bank shares.

News that Chevron Corp.'s refining margins fell in the second quarter is adding to the market's worries. On a year-over-year basis, Chevron's overall second-quarter results are forecast to be much lower than those for 2008. Oil prices subsequently resumed their descent early Friday after a slight pop on Thursday, falling below $60 a barrel.

The market is also on edge ahead of more earnings reports, which pick up pace next week. Investors have sent major indexes down about 7 percent since mid-June on the notion that a more than 40 percent run-up in stocks this spring was unwarranted considering the problems that still plague the economy.

One bit of good news Friday: the Commerce Department said the U.S. trade deficit narrowed to $26 billion in May — the lowest level in more than nine years. The report seemed to temper some of the market's losses.

Investors are also looking to a fresh reading on consumers' sentiment during July for more clues on the economy, to be released later Friday morning. The Reuters/University of Michigan index of consumer sentiment will come a day after the nation's retailers reported generally weak sales for June. The market is concerned that consumers, whose spending drives the economy, will keep cutting back as they worry about their job security.

In the first half hour of trading, the Dow Jones industrial average fell 31.06, or 0.4 percent, to 8,152.11. The Standard & Poor's 500 index lost 3.29, or 0.4 percent, to 879.39, while the Nasdaq composite index rose 3.92, or 0.2 percent, to 1,756.47.

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