Shares of consumer products companies dropped Tuesday morning before recovering later in the session, after Kimberly-Clark late Monday reduced its second-quarter and full-year outlook below analyst expectations.
Wachovia Capital Markets LLC analyst Jason Gere downgraded Kimberly-Clark Corp. to "Market Perform" from "Outperform," while Andrew Sawyer of Goldman Sachs reiterated a "Sell" rating.
"We view the stock as dead money until cost inflation is contained or subsides," Gere wrote in a note to investors.
Shares of Kimberly-Clark, maker of Huggies Diapers and Kleenex tissues, fell $2.46, or 4.2 percent, to $56.34.
Analysts said rising commodity costs that hurt Kimberly-Clark are likely to climb further.
Elsewhere, Cincinnati-based Procter & Gamble Co. reaffirmed its outlook for quarterly revenue and profit. The maker of Tide detergent, Duracell batteries and Pampers diapers still expects earnings per share in a range of 76 cents to 78 cents.
Analysts polled by Thomson Financial expect profit of 78 cents per share.
P&G shares rose 3 cents to $63.96.
Meanwhile, Colgate-Palmolive Co. said that it would meet or exceed analyst expectations for profit and revenue in its fiscal second quarter, which ended in June. On average, analysts expect earnings of 94 cents per share on revenue of $3.83 billion.
Colgate, maker of Softsoap, Hill's Science Diet pet food and Tom's of Maine toothpaste, is scheduled to announce its quarterly results on July 29.
Colgate shares slipped 3 cents to $68.93.
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