By Kate Gibson, MarketWatch
NEW YORK (MarketWatch) -- Further losses for Apple Inc.
pressured the technology sector Tuesday, as investors signaled
caution after mixed U.S. economic data and before major earnings
releases in the days ahead.
The Dow Jones Industrial Average (DJI) erased losses to trade
virtually unchanged at 13,507.13 in the early afternoon.
Shares of Hewlett-Packard Co. (HPQ) fell 2.9%, the biggest
decliner in the Dow, while Caterpillar Inc. (CAT) gained 1%, the
biggest gainer in the blue-chip benchmark.
The Standard & Poor's 500 index (SPX) declined less than a
point to 1,469.90, with technology standing out as the biggest
laggard and consumer discretionary performing the best among its 10
major sectors.
Earnings season really starts heating up later this week, with
reports due from some of America's biggest companies.
"Here we are on the eve of bank earnings coming out tomorrow,"
said Peter Cardillo, chief market economist at Rockwell Global
Capital, pointing to both J.P. Morgan Chase & Co. (JPM) and
Goldman Sachs Group Inc. (GS), as due to hand in their quarterly
report cards.
"Then we have other banking stocks on Thursday and Friday, along
with General Electric Co. (GE), so the market remains on the
skittish sidelines here," he added.
The Nasdaq Composite (RIXF) shed 8 points, or 0.3%, to
3,109.55.
Shares of Apple Inc. (AAPL) fell 2.5% to $489.40, a day after
the technology company's drop pushed two of the three benchmark
indexes into the red as Apple lost nearly 4% on reports it had cut
orders for iPhone 5 parts on weak demand -- that erased $17 billion
from the stock market.
Also in the tech sector, shares of Dell Inc. (DELL) rose nearly
3%, a day after reports that the PC maker was considering a buyout
via two private-equity firms.
More than 250 million shares traded on the New York Stock
Exchange as of 1 p.m. Eastern.
Composite volume topped 1.5 billion.
"Over the next week, mixed economic data and earnings are likely
to keep the market quite defensive, so we're provably headed to a
shallow pullback of 2% to 3%," Cardillo said.
Also Tuesday, investors digested economic reports that showed
U.S. retail sales climbing 0.5% and producer prices off 0.2% in
December, while a gauge of manufacturing activity in the New York
region contracted in January.
"We did have some better-than-expected retail sales [...] thanks
to Detroit, and inflation at the producer level is obviously not a
problem. The one thing that did take me by surprise was the New
York manufacturing index, which was worse, as I was looking for a
small gain here," said Cardillo.
Investors also kept tabs on the latest doings out of
Washington.
Federal Reserve Chairman Ben Bernanke said on Monday afternoon
that the central bank's aggressive bond-buying program is unlikely
to lead to higher inflation. He also said that Congress should
swiftly raise the debt ceiling.
Fitch Ratings reiterated its warning Tuesday that a delay in
raising that ceiling would lead to a formal review of the country's
AAA sovereign credit rating. On Monday, Treasury Secretary Timothy
Geithner said the U.S. could hit the debt ceiling between
mid-February and early March unless Congress took action to raise
it.
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