NEW YORK -- U.S. stocks closed lower yesterday as investors waited for corporate third-quarter results and today's release of September employment figures.
"Most investors are reluctant to do much right now until we see more earnings reports and the unemployment report," said William Raftery, market analyst at Smith Barney Shearson Inc.
The Dow Jones industrial average fell 15.36 points, to 3,583.63, hurt by computer-driven sell orders and declines in Chevron Corp. and AlliedSignal Inc. The blue-chip index gained 11.73 Wednesday on optimism that the Labor Department's report due today would show ample new hiring in September.
Broader stock indexes also declined yesterday. The Nasdaq Combined Composite Index fell 2.28, to 762.49, and the Standard & Poor's 500 Index slumped 1.56, to 459.18. The American Stock Exchange Market Value Index rose 0.59, to a record 463.95.
Three stocks were lower for every two that gained ground on the New York Stock Exchange. Telephone, electric utility and semiconductor issues led the retreat.
"I am still waiting for a big market correction," said Gil Knight, fund manager at ASB Capital Management Inc., who helps oversee $4 billion in investments. "Semiconductor stocks, a market leader, are showing signs of faltering, and I think you'll see the same start to occur in other industry groups."
The decline in semiconductor stocks followed Advanced Micro Devices Inc.'s release Tuesday of lower-than-expected earnings. The S&P Semiconductor Index, which includes AMD and industry bellwether Intel Corp., fell 2.78 yesterday, to 194.26.
Yesterday morning, the Labor Department reported that the number of workers filing new unemployment claims declined last week to the lowest level of the year. First-time claims fell 9,000, to a seasonally adjusted 320,000, the lowest since late December.
The jobs report prompted little change in long-term interest rates. The yield on the benchmark 30-year Treasury bond remained at 6.01 percent, unchanged from Wednesday.
Analysts estimated the economy added 138,000 jobs in September, according to a survey by Bloomberg Business News. The economy lost 39,000 jobs in August. The Labor Department will release the monthly employment report today at 8:30 a.m.
"People are becoming more optimistic about the economy and the outlook for earnings," said Peter Cardillo, research director at Westfalia Investments Inc. "That can only be good for the stock market over time."
"Chemical and Goodyear both pointed to better earnings yesterday, and I think you're going to see more and more companies report higher-than-expected earnings," Mr. Cardillo said.
However, some companies have announced lower-than-expected earnings, including AMD and VeriFone Inc. Corning Inc. joined this list when the company said third-quarter earnings before a restructuring charge would fall 10 percent short of last year's 53 cents a share.
Corning plunged $6.125, to $27.50, on 4.66 million shares traded. Corning was one of the five most actively traded issues on the U.S. Composite. The others were Intel Corp., Urban Shopping Centers Inc., which was an initial public offering, Synoptics Communications Inc. and Ocom Corp.
Intel fell 50 cents, to $68.75, on reports that Texas Instruments Inc. planned to unveil a new line of computer chips to compete against Intel and AMD in the $5 billion market for microprocessors, the Wall Street Journal reported.
Trading was active, as about 256 million shares changed hands on the Big Board.
Liberty Media Corp.'s Class A shares rose $1.50, to $28.50, on reports Tele-Communications Inc. is in talks to reacquire the cable television systems company.
Burlington Resources Inc. fell 12.5 cents, to $15. The energy and natural resource company said third-quarter net income slipped to 18 cents a share from 28 cents last year, below analysts' mean estimate of 32 cents.
Pyramid Technology Corp. declined $5.25, to $15.50. The computer maker said it expected to report lower-than-expected fourth-quarter earnings because of a shortfall in international revenue.
The company said earnings would be close to the 25 cents a share reported for the third quarter. Analysts were estimating the company would earn 34 cents a share in the quarter, according to I/B/E/S.