J&J earnings concern investors

NEW YORK - Investors grew cautious yesterday after quarterly sales at Johnson & Johnson fell short of expectations and an influential analyst stirred worries that bank shares are overheated.

Most stocks posted modest losses yesterday, a day after major indexes finished at their best levels in a year. The Dow Jones industrial average slipped 14 points, though the Nasdaq composite index edged higher.

Stocks could get a bounce today from Intel Corp., which posted earnings and sales after the closing bell that topped expectations. The chip-maker also said business was improving. Shares rose 4 percent in after-hours trading.

J&J was the first in a series of big companies to report quarterly results this week, and a 5 percent drop in sales at the maker of health-care products fanned concerns that companies have had to rely on cost-cutting to boost profits, as they did in the first half of the year. Investors are worried that earnings will suffer if sales do not improve.

Banking analyst Meredith Whitney lowered her rating on Goldman Sachs Group Inc. to "neutral" from "buy." Goldman's stock had risen 34 percent since Whitney upgraded the stock to "buy" in mid-July. The bank reports results tomorrow.

Health-care stocks stumbled after J&J's report and as the Senate Finance Committee approved a version of the health-care overhaul bill.

An agreement by Cisco Systems Inc., which makes computer-networking gear, to buy Starent Networks Corp. for $2.9 billion lifted shares of technology companies.

The Dow fell 14.74, or 0.15 percent, to 9,871.06. On Monday, it came within 69 points of the psychological barrier of 10,000.

The Standard & Poor's 500 index fell 3.00, or 0.28 percent, to 1,073.19. The Nasdaq rose 0.75, or 0.04 percent, to 2,139.89.

Investors have sent stocks higher recently on hopes that third-quarter earnings reports will signal that the economy is improving.

JPMorgan Chase & Co. reports today. Goldman Sachs, Citigroup Inc., and Bank of America Corp. also report this week. Shares of Goldman fell $2.92, or 1.54 percent, to $187.23 after the downgrade.

Johnson & Johnson shares fell $1.52, or 2.43 percent, to $61.01.

The ICE Futures U.S. dollar index, which measures the dollar against other major currencies, dropped to a 14-month low. Gold then hit a record high $1,069.70 an ounce, while oil rose 88 cents to settle at $74.15 a barrel on the New York Mercantile Exchange.