Market Update: Dow, Nasdaq Both End Sharply Lower; Kodak Day's Big Loser - TheStreet

Amid profit jitters, stocks slid to a very negative close.

On the heels of blue-chip component

Eastman Kodak's

(EK)

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

PaineWebber

lowered its rating to a neutral from a hold.

Kodak wasn't the only company attracting negative investor attention in recent trading.

After the

Supreme Court announced this morning that

Microsoft's

(MSFT) - Get Report

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

Millennium Pharmaceuticals

(MLNM)

,

Alexion Pharmaceuticals

(ALXN) - Get Report

and

Gilead Sciences

(GILD) - Get Report

, 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

Dell

(DELL) - Get Report

, and

Intel

(INTC) - Get Report

dropped 2% and 4.2%, respectively.

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Sector Watch

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

Northwest Airlines

(NWAC)

. Shares of Northwest were down 2.1%.

Financial stocks also suffered. The

American Stock Exchange Broker/Dealer Index

was lower by 2.1%. Component

J.P. Morgan

(JPM) - Get Report

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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Bonds/Economy

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

Reuters

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,"

Barclays Capital

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%.