Financial Markets : Dow Off 9.40 as Investors Await Profit Reports

U.S. stocks closed mostly lower Monday, losing Friday’s momentum as bond yields halted their downward trend.

The Dow Jones industrial average eased 9.40 points to 4,784.38, trimming a loss of more than 20 points posted earlier in the session.

Most broader stock indexes also fell modestly, and losers had a 12-11 edge over winners on the New York Stock Exchange.

Analysts said many investors are awaiting third-quarter corporate earnings reports, especially from market-leading technology firms.

Despite a strong recovery late last week following a heavy bout of profit taking, the stock market remains below its mid-September record highs. The Dow’s peak was 4,801.80, set Sept. 14.

Falling bond yields last week provided support for stocks, but on Monday the bond market rested. The 30-year Treasury bond yield closed unchanged at 6.30%, the lowest since February, 1994.

Still, bonds’ stability surprised some traders, who expected a selloff Monday in the wake of last week’s rally on low inflation reports. The 30-year T-bond was at 6.59% as recently as Sept. 28.

“The [bond] market still is in a bullish trend right now,� said Dan Bernzweig, trader at Bank Leumi Trust in New York. Nonetheless, he and other traders said profit taking in bonds is overdue.

For the stock market, any reversal in bonds could be hurtful unless corporate earnings are stronger than expected. And so far, the earnings picture has been mixed thanks to the sluggish economy.

“Earnings disappointments are going to cause problems for the market as a whole--they set the tone,� said Claudia Mott, analyst at Prudential Securities in New York.

In the technology sector, where some lower-than-expected earnings reports triggered the market selloff early last week, stocks were mixed ahead of semiconductor giant Intel’s third-quarter report. It was released after the market closed.

Intel’s results of $1.05 a share were a few cents ahead of the $1.02-a-share consensus forecast of Wall Street analysts. But Intel also warned that current profit margins may be unsustainable.

Intel shares added 37.5 cents to $63.125 during regular Nasdaq trading and inched up $1.375 in after-hours trading.

Among Monday’s highlights:

* Other tech stocks continuing to rebound included Hewlett-Packard, up 2 7/8 to 86 3/8; Motorola, up 1 1/8 to 64 3/8, and Seagate, up 1 to 43 5/8.

Sun Microsystems fell 1 5/16 to 58 5/8, but after the market closed the computer workstation maker reported quarterly earnings of 85 cents a share, up from 40 cents a year ago and far ahead of Wall Street analysts’ consensus estimate of 65 cents.

* Stocks responding positively to earnings reports included conglomerate Dover, up 2 to 40 5/8, and drug firm Pfizer, up 1 1/4 to 58 1/4.

* On the downside, stocks closing lower after reporting quarterly results included TRW, down 1 3/8 to 69 3/8; Golden West Financial, down 1 1/8 to 54 1/2; Federal Home Loan Mortgage, off 2 to 72; Ameritech, down 3/4 to 51, and food maker CPC International, off 1/2 to 69.

* Texas Utilities surged 1 3/8 to 36 after the firm slashed its cash dividend 35%, a long-awaited move that is expected to make the company financially stronger.

* Among the more controversial new stock issues this year, Rick’s Cabaret International went public at 3 a share and jumped to close at 5 in Nasdaq trading. The company operates a Houston bar that offers topless entertainment.

In currency trading, the dollar dipped as the Bank of France reversed a recent interest rate hike, prompting some traders to buy German marks. The dollar eased to 100.57 Japanese yen in New York from 100.97 on Friday, and to 1.424 marks from 1.428.

In foreign trading, Hong Kong’s Hang Seng stock index crossed the 10,000 mark for the first time in 13 months, jumping 1.3% to 10,009.28. In Tokyo, the Nikkei index rose 135.61 points to 18,016.44.

In Mexico, the Bolsa index added 14.69 points to 2,325.29.

Market Roundup, D8