Stocks fall for week on earnings concerns

US stocks fell for the second week in three as companies including JC Penney & Co and RF Micro Devices Inc. said results would be less than forecast.

Investors trying to predict profits "are having to take their guesstimates down," said Charles White, who helps manage US$2 billion at Avatar Associates. The S&P 500 is stuck below 880 and "this is ground we have trampled on for a long time. There doesn't seem to be a real defined reason to bust out of that level."

The Standard & Poor's 500 Index fell 1.2 percent to 868.30 for the week, giving it a loss for the year of 1.3 percent. The Dow Jones Industrial Average dropped 0.9 percent to 8,203.41 and the NASDAQ Composite Index fell 1.8 percent to 1,358.85.

Companies will report first-quarter earnings over the next few weeks. Profit for the S&P 500's members probably rose 8.3 percent, based on the average analyst forecast compiled by Thomson Financial. That's down from 11.7 percent at the beginning of the year and 17 percent on Oct. 1.

Goodyear Tire & Rubber Co. fell 18 percent, the biggest decline in the S&P 500. North America's largest tiremaker reported its fourth-quarter loss widened because the company wrote the down the value of tax credits by US$1.1 billion.

US Steel Corp had the index's biggest gain, rising 12 percent. It said it would cut 5,700 jobs, or about 20 percent of the workforce of the combined companies, if it wins a bid for bankrupt National Steel Corp over rival AK Steel Holdings Corp.

Stocks had rallied beginning March 12, the week before allied forces attacked Iraq. Benchmark indexes rose last week as coalition forces closed in on Baghdad and some Republican Guard forces surrendered, easing concerns about a prolonged war.

JC Penney lost 12 percent to US$17.89 for the week. The No. 2 US department-store chain said this quarter's profit will decline from a year earlier because March sales fell more than expected at its department stores and Eckerd drugstore chain.

RF Micro Devices, a maker of mobile-phone chips, sank 14 percent to US$5.14. Sales have been hurt by the war and by a shift to less-profitable components, the company said.

AT&T posted the biggest loss in the Dow, falling 7 percent to US$14.05. The biggest US long-distance telephone company is eliminating some management jobs and combining departments in an attempt to cut costs and improve customer service.

Altria Group Inc and McDonalds Corp had the biggest gains in the Dow this week.

McDonald's rose 8.5 percent to US$15.78. The world's largest restaurant chain said it will raise its dividend, buy back some shares, and pay down as much as US$700 million in debt this year.

The chain also will trim capital spending by 40 percent to US$1.2 billion.

Altria, the parent of the world's largest cigarette maker, rose 8 percent to US$30.59. An Illinois judge is considering alternatives to the US$12 billion bond the company must post in order to appeal a US$10 billion damage verdict. Altria's Philip Morris USA unit told the judge the bond may bankrupt the company.

The judge, Nicholas Byron, said he's making progress in reaching a compromise.

Some investors say they're not convinced the economy is rebounding. Avatar's White dismissed Friday's bigger-than-forecast jump in retail sales, attributing it to auto dealer promotions. While consumer confidence jumped in April, it was rebounding from a nine-year low last month as the war in Iraq wound down, he said.