U.S. MARKET AVERAGES

Stocks were weak Tuesday morning, dragged by mixed economic data and negative comments on Google.

The CFO of the Internet search giant announced that growth at the company is slowing down. The comments caused a sharp drop in Google's shares and the selling pressure spread to the rest of the Internet sector, dragging the Nasdaq 1%.

U.S. stocks suffered 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 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.

Staples (SPLS: chart) jumped to a new 52-week high, owing to a better-than-expected profit in Q4. The company also raised its dividend by 32%. Conseco (CNO: chart) was also lifted by strong earnings to a fresh peak. NPS Pharma (NPSP: chart) broke to a new high after it announced plans to advance clinical development of Teduglutide as a treatment for Crohn's disease.

Apollo Group (APOL: chart) dropped to a new 52-week low, falling 14% on disappointing earnings and guidance. Shanda Interactive Entertainment (SNDA: chart) broke to a fresh low after it reported a Q4 loss.

In midday trading, the Dow Jones industrial average fell 95.88, or 0.86%. The Standard & Poor's 500 index fell 12.84, or 0.99%, and the Nasdaq composite index fell 24.49, or 1.06%, hurt by the sharp decline in shares of Google.

Bonds edged higher, with the yield on the 10-year Treasury note falling to 4.55% from 4.59% late Monday.

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

The National Association of Realtors released its report on existing home sales in the month of January on Tuesday, showing that sales came in below economist estimates while home prices continued to appreciate at double-digit rates.

The report showed that existing home sales fell 2.8 percent to a seasonally adjust annual rate of 6.56 million units in January from an upwardly revised rate of 6.75 million units in December.

Economists had been expecting existing home sales to come in at a 6.75 million unit rate compared to the 6.60 million unit rate originally reported for December.

The report also showed that the national median existing home price rose 11.6 percent to $211,000 in January from $189,000 in the same month last year.