Amid profit jitters, stocks slid to a very negative close.
On the heels of blue-chip component
warning that third-quarter profits would fall short of expectations, the
Dow Jones Industrial Average ended mired deep in negative territory. The Dow ended down 176 points.
This morning, Kodak said that third-quarter earnings would be 20 cents to 25 cents below its previous estimate of between $1.56 and $1.66 per share. Analysts had expected the photo giant to come in at $1.60 per share.
Kodak CFO Bob Brust said the company had expected strong September sales to offset earnings pressures related to the rising dollar, increased raw-material costs and higher levels of digital investment. But that didn't happen, obviously.
Investors hammered Kodak's shares, which were recently trading down 24.8%, and analysts hacked their recommendations on the company's stock.
Credit Suisse First Boston
dropped the film company to a buy from a strong buy, and
lowered its rating to a neutral from a hold.
Kodak wasn't the only company attracting negative investor attention in recent trading.
Supreme Court announced this morning that
appeal of antitrust violations should first be heard by a lower appellate court, technology stocks resisted the Dow's downward pull. But the technology-laden
Nasdaq Composite Index -- which languished near the flatline during most of afternoon trading -- finished down 52 points.
Shares of biotech stocks put a lot of pressure on the Nasdaq. Biotechs in negative territory included
, off 4%, 7.4% and 8.4%, respectively.
Salomon Smith Barney
initiated coverage of several companies in the sector this morning, mostly with outperform or neutral ratings. The
Nasdaq Biotechnology Index
was lately off 2%.
Large-cap technology stocks
dropped 2% and 4.2%, respectively.
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With oil concerns still on investor's minds, transport stocks took a turn for the worse today. The
Dow Jones Transportation Average
was down 1.5%. Additionally, this morning,
Donaldson Lufkin & Jenrette
lowered its stock price target and earnings estimates on component
. Shares of Northwest were down 2.1%.
Financial stocks also suffered. The
American Stock Exchange Broker/Dealer Index
was lower by 2.1%. Component
has been giving back the solid gains it posted yesterday. Shares of the investment house were lower by $3.69 or 2.2%, to $164.06. The stock took away some 22 points from the Dow.
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The Treasury market was narrowly mixed amid stable oil prices and a stronger-than-expected
Consumer Confidence Index.
Oil is well off the 10-year highs it hit last week, thanks to the Clinton Administration's decision to release some from the country's emergency stockpiles. That's a positive for the bond market. Rising oil prices make bond buyers stingy to the extent that they threaten to lift the inflation rate.
Meanwhile, consumer confidence remains high in spite of the rise in energy prices, indicating that any adverse impact on growth may be muted. The Consumer Confidence Index rose to 141.9 in September from 140.8 in August. Economists polled by
had forecast a smaller rise, to 141.4, on average.
"The reaction of consumers remains a key factor that will determine how recent energy price increases will affect the economy,"
economist Henry Willmore wrote recently. "So far it appears that consumers are remaining confident. This will delay and possibly mute the impact of higher oil prices on growth."
The benchmark 10-year
Treasury note lately down 1/32 to 99 17/32, making its yield 5.811%.