Stocks slipped in early afternoon trading today despite a slide in oil prices as March retail sales fell short of expectations and investors eyed earnings and forecasts from a number of companies, including a bright outlook from Dow component McDonald's Corp.
The disappointing retail sales were a distraction for investors, who shrugged off the sharp decline in oil futures to focus on other concerns, including first-quarter results. Wall Street was also digesting the minutes of last month's Federal Reserve meeting, trying to decide whether inflation would cause policy makers to become more aggressive with interest rate hikes.
At 1 p.m., the Dow Jones industrial average was down 20.02, or 0.19 percent, at 10,487.95.
The broader gauges also fell. The Standard & Poor's 500 index lost 5.43, or 0.46 percent, to 1,182.33. The Nasdaq composite index fell 14.86, or 0.74 percent, to 1,990.54.
The U.S. dollar was mixed against other major currencies. Gold prices rose.
The International Energy Agency forecast slower growth in oil demand this year, and the U.S. Department of Energy reported a larger-than-expected build in fuel supplies, sending crude futures sagging. Light, sweet crude for May delivery shed $1.31 to $50.55 per barrel on the New York Mercantile Exchange. Analysts said the lack of a positive reaction in stocks suggests investors are skeptical about whether the declines will stick.
"I think the fact that the price of oil has come down into the low $50s is lovely, but I don't think we as investors have any confidence that can necessarily last," said Linda Duessel, market strategist at Federated Investors in Pittsburgh. "We're just floundering around with some news in a very tight range."
In economic news, retail sales rose by a modest 0.3 percent in March, according to the Commerce Department, the weakest showing since January, as the potential for an early Easter shopping rush was trumped by cold weather and higher fuel costs. The increase was significantly below market expectations for a 0.8 percent surge in sales.
Morgan Stanley was down 70 cents at $53.78 following reports that two top investment bankers planned to resign, as the securities firm faces a swelling controversy over its lackluster performance under chief executive Philip Purcell. Joseph Perella was resigning, according to his personal spokesman, and Terry Meguid was also expected to step down, the Wall Street Journal said.
McDonald's rose 63 cents to $31.53 after saying it expects first-quarter profits to come in above Wall Street estimates thanks to customer initiatives and a boost from the early Easter holiday. The fast food leader said it expects earnings of 56 cents per share, well above the average analysts estimate for profits of 42 cents per share, according to Thomson Financial.
Harley-Davidson Inc. shed 17 percent, or $9.91, to $48.86, after the motorcycle manufacturer reported earnings that beat estimates by a penny a share, but cut its shipment and profit forecasts for the year due to weaker sales.
Wal-Mart Stores, the world's largest retailer, gained 18 cents to $48.81 after Prudential Equity Group upgraded its rating to "neutral" from "underweight." Analyst Wayne Hood wrote in a research note that declines in Wal-Mart's stock price better reflect "the company's fundamental growth prospects and ongoing challenges."
Intel, the biggest maker of computer chips, slipped 22 cents to $23. Applied Materials, the world's No. 1 maker of semiconductor-production equipment, dropped 23 cents to $15.69.
Apple Computer, which reports quarterly earnings today, dropped 50 cents to $42.16. The maker of the iPod digital music player may report earnings of 24 cents a share for the fiscal second quarter, according to analysts in a Thomson Financial poll. Apple forecast profit of 20 cents on Jan. 12. The company is due to release earnings after the close of U.S. trading.
The Russell 2000 index, which tracks smaller company stocks, was down 4.43, or 0.72 percent, at 608.60. Decliners outnumbered advancing issues by about 3 to 2 on the Stock Exchange. Volume came to 610.76 million shares, compared to 548.62 million shares traded at the same point Tuesday. Overseas, Japan's Nikkei stock average shed 0.28 percent. In afternoon trading in Europe, France's CAC-40 added 0.49 percent, Britain's FTSE 100 rose 0.30 percent and Germany's DAX index was up 0.77 percent.