Halloween Fright Comes a Day Late; Dow, Nasdaq End With a Rock
Looks like Wall Street got the sweets out of its system yesterday, because today's session ended on a sour note.
The
Dow Jones Industrial Average reached into its goodie bag today, but came up empty-handed. At last look, the blue-chip measure was off its lows but still closed in the red. The
Nasdaq Composite Index, which burst 178.2 points after several sessions of losses yesterday, also fell off its sugar-high today.
Topping the late afternoon headlines was communications company
WorldCom
(WCOM)
. Earlier today, it warned about a revenue shortfall for the fourth quarter and announced plans to spin off its consumer business, MCI.
TheStreet.com
wrote a separate story about the
WorldCom woes earlier today.
Investors hung WorldCom's stock out to dry and the stock ended down 20.3%. Fellow communications companies dropped in sympathy with WorldCom.
British Telecom
(BTY)
decreased 3.8%;
Vodafone
TheStreet Recommends
(VOD) - Get Vodafone Group Plc Report
dropped 5.1%;
SBC Communications
(SBC)
lowered 2.8%. Additionally,
AT&T
, which announced a restructuring plan just last week, slid 5.9%.
A research report from
Goldman Sachs
took a bite out of brokerage stocks this afternoon. Earlier today, Goldman reduced fourth-quarter earnings forecasts by about 9% for
Lehman Brothers
(LEH)
,
Morgan Stanley Dean Witter
(MWD)
and
Merrill Lynch
(MER)
. The investment firm cited softness in the IPO market and private equity businesses.
Salomon Smith Barney
, for its part, got in on the action with its own set of downgrades on the brokerage industry. Solly lowered its fourth-quarter earnings estimates for Goldman Sachs, Lehman Brothers and Morgan Stanley.
Lehman ended off 5.6%, Morgan Stanley was off 1.6%, and Merrill slipped 1.9%.
In the technology arena, specialty chipmaker
Altera
(ALTR) - Get Altair Engineering Inc. Report
announced that revenue growth would be at the lower end of a forecasted 12% to 15% range, triggering the Wall Street community to hack their recommendations on its stock.
Morgan Stanley Dean Witter
cut the chipmaker to outperform from strong buy and lowered its price target to $65 from $92.50.
W.R. Hambrecht
downgraded Altera to neutral from strong buy.
Merrill Lynch
cut its 2000 EPS estimate to $1.02 from $1.03 and 2001 EPS estimate to $1.50 from $1.53.
Bear Stearns
, however, reiterated its buy rating and $100 target, while
Deutsche Banc Alex. Brown
maintained its strong buy rating.
The semi stock ended down 20.5%. Meantime, the
Philadelphia Stock Exchange Semiconductor Index
, which tracks the performance of chip companies, was off 3.8%.
Dow pillars of strength this afternoon were
ExxonMobil
(XOM) - Get Exxon Mobil Corporation Report
, up 3.2% and
Wal-Mart
(WMT) - Get Walmart Inc. Report
, higher by 2.9%. Weaker outposts included
Procter & Gamble
(PG) - Get Procter & Gamble Company (The) Report
, down 3.4%;
Hewlett-Packard
(HWP)
, sinking 4.4%; and
American Express
(AXP) - Get American Express Company Report
, off 2.7%.
Sector Watch
Oil stocks, which have seen it prices gush in recent days, were up this afternoon. With oil trading at $33.20 a barrel, the
Philadelphia Stock Exchange Oil Service Index
popped 5.9%.
Internet stocks were flying today.
Amazon.com
(AMZN) - Get Amazon.com Inc. Report
was up 2.1% after it reiterated confidence in its business strategy this morning.
Yahoo!
(YHOO)
soared 9.8%,
eBay
rose 4.9% and
CMGI
(CMGI)
was up 22.6%.
TheStreet.com Internet Sector
index was up 3.9%.
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Bonds/Economy
Bonds were little changed, with traders continuing to expect that this week's economic data will show further signs of a slowing economy and underpin the bond market's strong performance. A weak opening on the stock market also helped bonds.
The benchmark 10-year
Treasury note was unchanged at 100 1/32, yielding 5.744%.
The 30-year
Treasury bond was at 106 19/32, yielding 5.783%.
The October
Purchasing Managers' Index
(
definition |
chart |
) fell to 48.3 from 49.9 in September.
The
Mortgage Applications Survey
(
definition |
chart |
source
) for the latest week rose to 654.6 from 587.2 in the prior period.
Construction spending
(
definition |
chart |
source
) for September rose 2.4%, after a 1.8% gain in August.
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