NEW YORK (AP) — Tech giant Hewlett Packard dragged the Dow Jones industrial average lower in early trading Tuesday.
Hewlett Packard Co., the world’s largest technology company by revenue, said profits rose in the most recent quarter. But a leaked memo from the company’s CEO, warning of a rough quarter, overshadowed the most recent quarter. HP lowered its earnings outlook Tuesday for the rest of the year, expecting weaker sales of personal computers. The company was also effected by the earthquake in Japan and restructuring in its services business is dragging on. HP’s stock fell more than 6 percent, more than any other company in the Dow average.
Home Depot Inc. and Wal-Mart Stores Inc., two other Dow members, also reported results Tuesday. Wal-Mart said its profit rose 3 percent in the first quarter, but sales at stores open at least a year fell for the eighth quarter in a row. Wal-Mart’s stock fell 1 percent.
It was a similar story at Home Depot. Sales also slipped. But net income jumped 12 percent in the first quarter, beating analysts’ expectations. Home Depot rose more than 2 percent.
The Dow fell 48 points, or 0.4 percent, to 12,500 in morning trading. The Standard & Poor’s 500 index fell 2 points to 1,328. The Nasdaq composite dropped 8 points, or 0.3 percent, to 2,773.
A batch of economic reports also raised concerns about the economy’s strength. The Federal Reserve said U.S. factories produced fewer goods for the first time in 10 months. Construction of new homes plunged in April, according to the Commerce Department. Apartment construction plummeted more than 28 percent.
A bumpy ride for the tech sector and renewed concerns about Europe’s debt dragged stocks lower on Monday. European finance ministers approved $110 billion in rescue loans to Portugal, but have yet to decide on a second rescue package for Greece.
Even with a majority of companies reporting stronger earnings, the U.S. stock market has lost some of its momentum in the last few weeks. Concerns are growing that high gas prices will weigh on the economy, pinch consumer spending and cut into corporate profits.
The three major stock indexes are down more than 2 percent this month after a strong start to the year. The Dow remains up 8 percent. The S&P 500 is up 5.6 percent.
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