U.S. MARKET AVERAGES

U.S. stocks moved lower on renewed fears of accelerating inflation and further interest-rate hikes after a government report showed the economy grew slightly faster in the fourth quarter than first reported.

The Commerce Department reported Q4 GDP up to 1.6% from 1.1%, meeting economist expectations. The GDP deflator, a gauge of inflation, rose at an annualized pace of 3.3%, more than the 3% estimated previously.

The Conference Board reported sharper-than-expected drop of consumer confidence index. According to the report the CCI fell to 101.7 in February from a revised 106.8 in January. Economists had expected a more modest decline to a reading of 104.0.

In earnings news, H.J. Heinz Co., one of the world's largest food producers, posted Q3 earnings drop of 24% due to higher costs, missing analysts' expectations. Office supply retailer Staples Inc posted 15% profit rise in Q4, beating expectations by a penny.

Energy stocks posted weakness in early trading, including a 1.3% decline in the oil service sector. The transportation group, especially airlines and railroads also moved to the downside. The biotech sector was also one of the early decliners.

The Dow Jones industrial average was down 75.72 points, or 0.68%. The Standard & Poor's 500 Index was down 10.83 points, or 0.84%. The Nasdaq Composite Index was down 23.54 points, or 1.02%.

Treasury yields were slightly lower in the early going, giving back some of Monday''s advance. The 10-year yield remained in a recent trading range, dropping by 1.3 basis points to 4.577%.

MOVERS AND SHAKERS

Apollo Group (APOL: chart) projected Q2 net income of 43-44 cents a share and revenue of $570 million, below analyst forecasts of earnings of 54 cents a share and revenue of $586 million. The company, due to report earnings on March 23, didn't provide outlook commentary. The stock fell 12%.

Dycom Industries (DY: chart), provider of specialty contracting services, reported Q2 net income drop of 10 cents a share compared with 15 cents in the year-earlier period. Revenue rose to $244.1 million from $224.5 million. Company’s quarterly results beat expectations of earnings of 8 cents a share on revenue of $213 million. The stock dropped 11%.

BJ Services (BJS: chart), oil-services provider, was cut to neutral from buy at Merrill Lynch. The broker cited a continued drop in natural-gas prices and blamed the company's conservative strategy which caused it to lose market share to smaller and more aggressive rivals. The stock lost 5.2%.

Dynamic Materials (BOOM: chart), metalworking company, reported a 50% rise in Q4 earnings. The company posted profit of $3.5 million, or 28 cents a share, up from $2.3 million, or 20 cents a share a year ago. Sales climbed 16% to $23.2 million. The company said it will increase its capex budget to $4.5 million in 2006, up about 50% from 2005, to expand production capacity at both of its divisions. Company’s shares rose 10%.

Marvel Entertainment (MVL: chart) was upgraded at J.P. Morgan to overweight from neutral, which said share buybacks and a strong movie slate in 2007 should enable the company to perform better than its rivals. The broker expects the stock to outperform due to the release of 'Spider-Man 3', 'Fantastic Four 2' and 'Ghost Rider'. The stock gained 5%.

ECONOMIC NEWS

Consumer confidence fell much more than expected in the month of February, according to a report from the Conference Board, with consumer expressing concerns about the outlook for the economy.

The Conference Board said that its consumer confidence index fell to 101.7 in February from a revised 106.8 in January. Economists had expected a more modest decline to a reading of 104.0 compared to the 106.3 originally reported for January.

The decrease by the index came as a modest increase by the present situation index was more than offset by a notable decline by the expectations index.

The report showed that the present situation index rose to 129.3 in February from 128.8 January, reaching its highest level since the month before the September 11th terrorist attacks. The reading suggests that the start of 2006 will be better than the end of 2005