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 Consumer Price Index didn't help market sentiment much. The most important inflation indicator for the market, the CPI came in hotter than expected this morning. The headline number hit a 0.5% rise, vs. expectations of 0.4%. The core number, which excludes food and energy prices, came in at a 0.3% jump, vs. expectations of a 0.2% rise. The core number is biggest gain since March, when it rose 0.4%. And nobody likes inflation.

The CPI measures the change in cost of a representative basket of goods and services such as food, energy, housing, clothing, transportation, medical care, entertainment and education.

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Bonds/Economy

The benchmark 10-year Treasury note was up 12/32 at 100 28/32, yielding 5.632%, marking a new low for the year.

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International

European markets were awash in red this morning following the bad news from IBM last night.

London's FTSE 100 had broken away from the flatline into the green. It was lately down 122.60 to 6080.60.

The CAC 40 in Paris was down 203.90 to 5863.25, while the Xetra Dax in Frankfurt was off 167.17 to 6364.54.

The euro continued lower, lately trading down to 0.8519.

The major Asian equity markets closed broadly lower Wednesday, as the region's technology shares got pounded after IBM reported weak revenues Tuesday.

In Tokyo, the Nikkei 225 tanked 467.7, or 3.1%, to close at 14,872.5, ending under 15,000 for the first time in more than a year and a half.

In Tokyo trading, the dollar fell to 108.05 yen.

Elsewhere, Taiwan's TWSE index closed off 270.1, or 4.7%, at 5432.2, as chipmakers including Taiwan Semiconductor(TSM Quote), which dropped nearly 7%, got mauled. Hong Kong's Hang Seng index fell 414.9, or 2.8%, to 14,458.5.

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