Kitsap Business and Economy

Now at 8,140, down 42 points …

NEW YORK (AP) — Falling oil prices and unease over corporate earnings are putting more pressure on stocks.

Stocks were mostly lower in midday trading Friday as investors shed positions in energy, industrial companies and banks. Both the Dow and the S&P 500 headed toward their fourth straight week of losses — the longest losing streak since the market’s rally began in March.

Oil producers fell sharply after Chevron Corp. said its refining margins fell in the second quarter and will send its results for the period much lower compared with last year.

In another blow to energy stocks, the price of crude oil resumed its descent Friday following a slight pop on Thursday, which had broken six straight days of declines. Investors are also seeing the plunge in oil prices as a weak indicator for the economy, which won’t be as hungry for energy as long as the recession lingers.

The stock market is on edge as the second-quarter earnings season gets under way. Aluminum maker Alcoa Inc. unofficially kicked off the period with better-than-expected results on Wednesday, but the warning from Chevron late Thursday put investors back on the defensive. Both Alcoa and Chevron are components of the Dow Jones industrial average.

The pace of earnings reports picks up speed next week with results coming in from heavy hitters such as Johnson & Johnson, JPMorgan Chase & Co., and Google Inc. The market is looking closely to the reports and the forecasts companies make for signals on where the economy might be headed.

Investors have sent major indexes down about 7 percent since mid-June on the belief that a more than 40 percent run-up in stocks this spring was unwarranted considering the problems that still plague the economy such as rising unemployment and flagging

consumer confidence.

“You’re not seeing people invest because the fundamentals aren’t there,” said Dawn Bennett, CEO of Bennett Group Financial Services. “This is a really weak economic environment.”

In early afternoon trading, the Dow Jones industrial average fell 49.58, or 0.6 percent, to 8,133.59. The Standard & Poor’s 500 index lost 4.43, or 0.5 percent, to 878.25, while the technology-heavy Nasdaq composite index slipped 0.69, or 0.04 percent, to 1,751.86. A handful of upgrades to technology shares helped temper losses in the Nasdaq.

The declines Friday come after a small advance the day before, when all the major indexes posted single-digit gains. Finding some encouragement in better-than-expected results from aluminum maker Alcoa, investors put money into commodities producers, banks and industrial companies.

Despite the slight increase in risk-taking Thursday, the market’s mood is still cautious as investors remain anxious about the state of the economy. Expectations are generally low for the news expected to come out of the second-quarter earnings season.

“Do you really want to get aggressive before earnings when we don’t have perfect clarity?” said Alan Villalon, senior research analyst at First American Funds in Minneapolis.

Falling crude prices continued to weigh on the market. A barrel of crude traded at $59.72, down 69 cents, on the New York Mercantile Exchange. Oil prices have fallen sharply since hitting an eight-month high of $73 early last week.

Chevron shares fell $1.84, or 2.9 percent, to $61.24, while Exxon Mobil Corp. fell 93 cents to $65.04.

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.

In corporate news, General Motors Corp. CEO Fritz Henderson announced that the automaker has emerged from bankruptcy protection after just a little over a month of being under court supervision. He said the company now will focus more on customers, including a partnership with eBay for people to buy vehicles by auction online.

Small gains in technology shares helped mitigate the market’s losses. Some technology companies moved higher after Goldman Sachs upgraded its view on both hardware and software providers, noting signs of stabilization in the industry.

Citrix Systems Inc. gained 63 cents, or 2 percent, to $32.05, while Dell Inc. added 4 cents to $13.19. Yahoo Inc. shares rose more than 3 percent, adding 51 cents to $15.06, after an upgrade from Thomas Weisel.

Overseas, Japan’s Nikkei stock average fell 0.04. Britain’s FTSE 100 fell 0.8 percent, Germany’s DAX index fell 1.2 percent and France’s CAC-40 lost 1.4 percent.

Bond prices rose, sending their yields lower. The yield on the benchmark 10-year Treasury note, a widely used benchmark for consumer loans such as mortgages, fell to 3.30 percent from 3.41 percent late Thursday.

In other trading, the Russell 2000 index of smaller companies fell 0.40, or 0.1 percent, to 478.87.

About three stocks fell for every two that rose on the New York Stock Exchange, where volume came to a relatively low 442.3 million shares compared with 469.9 million shares the same time a day earlier.

The dollar rose against other major currencies, while gold prices were down.

This entry was posted on Friday, July 10th, 2009 at 9:55 am by Rachel Pritchett and is filed under Uncatagorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.