Stocks slip in morning trading on Wall Street

Associated Press
FILE - In this Friday, Jan. 17, 204, file photo, Trader Peter Tuchman works on the floor of the New York Stock Exchange. (AP Photo/Richard Drew)
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FILE - In this Friday, Jan. 17, 204, file photo, Trader Peter Tuchman works on the floor of the New York Stock Exchange. (AP Photo/Richard Drew)

NEW YORK (AP) — U.S. stocks were mostly lower in early trading Tuesday as investors assessed the latest round of company earnings. Materials companies rose, led by gains in Dow Chemical and aluminum maker Alcoa.

KEEPING SCORE: The Standard & Poor's 500 index fell three points, or 0.2 percent, to 1,835 as of 11:15 a.m. Eastern time. The Dow Jones industrial average slipped 110 points, or 0.7 percent, to 16,348. The Nasdaq composite edged up one point, or less than one-tenth of percentage point, to 4,198.

BLUE CHIP BLUES: Two Dow components, Verizon Communications and health care giant Johnson & Johnson, fell after delivering mixed results. Both companies reported higher income than analysts had expected, but investors seem to be more focused on the outlook for the coming year. Verizon lost $1.34, or 2.8 percent, to $47.01 and J&J fell $1.97, or 2 percent, to $93.09.

MATERIAL GAINS: Dow Chemical surged $2.23, or 5 percent, to $45.30 after hedge fund Third Point said it has taken a stake in the company and wants it to spin off its petrochemicals division. Alcoa climbed 76 cents, or 6.7 percent, to $12.12 after analysts at JPMorgan raised their price target for the stock, predicting Alcoa will benefit from tightening aluminum markets.

EARNINGS WATCH: "Earnings have been good but not great," said JJ Kinahan, chief strategist at TD Ameritrade. Before Tuesday's earnings reports came out, about half of the companies that had released earnings had beaten analysts' expectations, according to S&P Capital IQ. Earnings are forecast to rise 5.3 percent in the fourth quarter over the same period a year ago.

ECONOMY LIGHT: Company earnings will likely be the main focus for investors this week. There are no major economic releases scheduled for Tuesday and the Federal Reserve's next policy meeting won't start until next week.

MORE CUTS COMING: Fed policymakers will further reduce their economic stimulus after the meeting, according to the Wall Street Journal, which cited interviews with central bank officials and their most recent speeches. The Fed in December reduced its monthly bond purchases to $75 billion from $85 billion. The stimulus has kept long-term interest rates low and helped underpin a rally in stocks.

GAINING ALTITUDE: Delta increased 86 cents, or 3 percent, to $31.93 after reporting a better-than-expected profit in the fourth quarter as fares and traffic rose. The airline's president said demand was strong, and forecast that profit margins would increase in the current quarter.

TREASURIES AND COMMODITIES: The yield on the 10-year Treasury note rose to 2.83 percent from 2.82 percent on Friday. U.S. markets were closed Monday for the Martin Luther King Jr. Day holiday. The price of oil rose 13 cents, or 0.1 percent, to $94.70 a barrel. Gold fell $12.20, or 1 percent, to $1,240 an ounce.

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