Today's Market: Dow Down About 300 Points; IBM, J.P. Morgan Shouldering the Blame
(Updated from 9:52 a.m.)
It doesn't look good. And it isn't. The Dow Jones Industrial Average
was lately below the psychologically important 10,000, lately trading off 298 to 9790. The Nasdaq Composite Index
was off 129 to 3085. And the S&P 500
moved 31 lower to 1319. Friday's runaway rally was a distant memory this morning. In the past two days of trading, the semiconductor sector has washed away whatever optimism that late-week rally initially inspired. Earnings and revenue misses from chip companies and negative analyst comments tore into the major market indices yesterday. The boxmakers (those companies that make our computers) are doing the trick today. Though it met earnings estimates, box-making bellwether IBM(IBM Quote) reported lower-than-expected revenues yesterday after the close. And it was a little ambiguous about its expectations for the fourth quarter. Analysts have begun circling IBM. Bear Stearns kept its buy rating on the company, but slashed its 2000 and 2001 estimates. Revenue in 2000 is now expected to come in at $87.8 billion, compared with the previous call of $90.3 billion. The 2001 revenue estimates were trimmed to $95.2 billion from $98.8 billion. The analyst maintained its fiscal earnings per share outlook, keeping 2000's $4.45 a share earnings estimate and 2001's $5 call. Goldman Sachs knocked the company off its recommend list. In early trading, IBM was getting whacked, down 17.7% to $93. Investors hadn't expected any disappointments because the company didn't preannounce, and IBM had soared over the past few days. During this reporting season, investors are listening closely to what companies are saying about upcoming quarters. Wall Street is worried about just how much and how fast economic growth -- and corporate profits -- are slowing. Many market pros were hoping that once the "preannouncement" season ended and the actual earnings reporting season began, there would be enough positive surprises to alleviate fears that corporate earnings were really on the rocks. But the reports have been mixed, and investors are concentrating on the bad. Another earnings miss this morning came from Chase Manhattan(CMB Quote), which this morning posted third-quarter earnings that fell far short of Wall Street's expectations, as the tumbling Nasdaq pressured results at its venture-capital arm. Chase was lately off 11.7% to $33.50, and its shares were lately halted. The September Bonds/Economy
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