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By Elizabeth Lazarowitz

NEW YORK, April 7 (Reuters) - Stocks hung near session lows at midday on Wednesday as disappointing earnings from companies like aluminum producer Alcoa Inc. (nyse: AA - news - people) left Wall Street cold and investors awaited more news on first-quarter earnings.

Alcoa, a member of the Dow Jones industrial average <.DJI>, late Tuesday posted quarterly earnings that nearly doubled, on higher aluminum prices and strong sales to car and plane makers, but the results fell short of Wall Street's target.

Seagate Technology (nyse: STX - news - people), the top U.S. maker of computer hard disk drives, also disappointed Wall Street when it warned its quarterly results would disappoint, citing slower demand than normal for this time of year.

"There's obviously a very big disappointment with the Alcoa earnings, and maybe Seagate," said Hugh Johnson, chief investment officer at First Albany Corp. "We're starting the earnings season, and we're not starting on a particularly strong note."

"It has really caused some who are worried about valuations to take some money off the table," he added.

Concerns about mounting violence in Iraq were also dampening Wall Street sentiment as American and other troops faced some of the deadliest fighting since the U.S.-led invasion over a year ago.

The Dow fell 97.40 points, or 0.92 percent, to 10,473.41, and the Standard & Poor's 500 Index <.SPX> sagged 9.01 points, or 0.78 percent, to 1,139.15. The technology-laced Nasdaq Composite Index <.IXIC> was off 18.36 points, or 0.89 percent, at 2,041.54.

Alcoa fell 3.9 percent to $35.08, weighing on the Dow.

Seagate, among the New York Stock Exchange's most actively traded stocks, was off its lows of the day of still down about 8 percent at $14.34.

Geopolitical issues, which had faded into the background for Wall Street in recent weeks as investors focused on the outlook for the economy and corporate earnings, have begun to re-emerge amid a rising wave of violence in Iraq.

U.S.-led forces battled Sunni guerrillas in two cities on Wednesday and grappled with a radical Shiite uprising in a two-front war that has killed more than 30 soldiers and 160 Iraqis in three days.

"The market appears to be at a tipping point related to the tensions building in Iraq," said Keith Keenan, vice president of institutional trading at brokerage Wall Street Access. "Any further headlines, which are likely to be, unfortunately, negative, could weigh on the market."

Stock investors are anxiously waiting to see if first-quarter earnings can measure up to the lofty expectations built up in recent weeks -- expectations that have helped put the three major market gauges back within striking distance of their 2004 highs.

Internet media company Yahoo Inc. (nasdaq: YHOO - news - people) will report results after the close, and General Electric's (nyse: GE - news - people) quarterly scorecard is slated for release on Thursday..

A report on import and export prices, data that Wall Street usually gives little more than a cursory glance, caught the attention of some investors after the March figures soared well above expectations.

Import prices rose 0.9 percent, above the 0.5 percent gain economists had expected, heightening fears inflation may be working its way through the system and could force the Federal Reserve to hike interest rates soon.

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