Stocks sunk Tuesday as investors were put off by weaker-than-expected earnings from aluminum producer Alcoa Inc. and chip maker Advanced Micro Devices Inc. issued a sales warning.
The Dow Jones Industrial Average fell 64.81, or 0.6 percent, to 10,556.22. The Standard & Poor's 500 Index fell 7.26, or 0.6 percent, to 1,182.99. The Nasdaq Composite dropped 17.42, or 0.8 percent, to 2,079.62.
Stocks were also held back by nervousness over Intel Corp.'s earnings report. After the close, Intel reported quarterly net income of 33 cents a share, two cents higher than the median estimate of Wall Street analysts, as it cut prices to reduce inventory. Its shares rose about 2 percent in after-hours trading, to $23.01.
Among local companies, Farmer Brothers Co. rose for the second day, adding 10.5 percent to $27.49 a share, a day after the Torrance-based coffee roaster announced the unexpected death of its chairman and chief executive, Roy E. Farmer. News reports citing coroner's officials in Orange County said Farmer died of a self-inflicted gunshot. Investors are speculating that the company, kept under family control by Farmer and his late father, Roy F. Farmer, will now be sold.
Tag-It Pacific Inc. jumped 8.5 percent to $4.60 after the Woodland Hills-based apparel company announced its Talon Division signed its fifth franchise agreement, a three-year, $6.8 million agreement in the Asian region.
And California Pizza Kitchen Inc. gained 0.8 percent to $23.73 after the L.A.-based restaurant chain reported net income of $115.1 million for the fourth quarter ended Jan. 2, compared to $96.1 million in the comparable quarter of 2004. Comparable store sales increased 7.7 percent over the period one year ago.
On the down side, the Direct TV Group Inc.'s share price fell 2.5 percent to $16.20 after the El Segundo-based firm's stock was downgraded to "hold" from "buy" by Smith Barney Citigroup. The downgrade was due to a number of factors, including the company remaining restricted in its ability to return cash to investors.
And shares of Hot Topic Inc. slipped 0.7 percent to $17.27 after D.A. Davidson & Co. initiated coverage of the City of Industry-based mall retailer at "neutral."
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