Hopes of a four-day rally on the Nasdaq Composite Index were dashed today, despite investors' best efforts to shake off high-profile earnings warnings from the PC sector.
said that it would miss first-quarter estimates, citing what have become familiar problems -- worsening economic conditions and a slowdown in technology spending.
Just minutes after H-P's warning,
reported fourth-quarter results that badly missed reduced earnings estimates and cut its projections for 2001.
Both of those stocks -- which got heaps of analyst downgrades this morning -- were taken down in trading today: H-P was off 5.2% to $30.69, while Gateway was down 7.9% to $21.10. The
Philadelphia Stock Exchange Computer Box Maker Index
was behind 2.6%. Selling spread to the chip sector, where the
Philadelphia Stock Exchange Semiconductor Index
was lower by 2.6%.
Hewlett-Packard's losses put pressure on the
Dow Jones Industrial Average -- which ended off its lows and down 85 to 10,524. Still, the biggest drag on the blue-chip index was
-- a victim of some hefty profit-taking this afternoon. United Tech was down 4.3%, to $70.69.
Losses from the consumer products and chemical sectors also kept the Dow underwater. Shares of
Procter & Gamble
dropped 3.4% to $70.31, while
fell 4% to $43.19.
Elsewhere in technology,
, which beat expectations for the quarter but gave disappointing guidance about its future, plunged 18.9% to $35.19 in afternoon action. In a comment today,
acknowledged the quarter's good results, but said it was " concerned with a perceived slowdown in sequential revenue growth when deferred revenue is taken into account." Sequential (or quarter-over-quarter) revenue growth increased 26%, less than in previous quarters.
Over in the Internet corner, online advertising company
was pulling off a nice bounce, after announcing better-than-expected results for its fourth quarter last night. The stock was 31.1% higher to $14.75.
TheStreet.com Internet Sector
was ahead 5% to 360.
Afternoon market activity saw energy stocks fall along with the price of crude oil. Prices had risen earlier this week on expectations that OPEC, the organization of oil exporting countries, would cut production at its meeting next week. But most market-watchers think the projected production cuts of 1.5 million barrels a day have already been accounted for in crude oil prices.
American Stock Exchange Natural Gas Index
was down 0.6% and the
American Stock Exchange Oil & Gas Index
was little changed.
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Treasuries were trading lower -- sharply so in the long-term market -- as the latest economic reports have traders wondering if the recent dire predictions about the economy are accurate. Stocks started on a low note, as well, but there seemed to be little movement of assets from equities to fixed income, and, in any case, stocks were lately mixed. Yields on the 10-year note and the long bond were climbing.
Analysts are increasingly concerned about the possible
Federal Reserve reaction to the most recent information on the economy. The retail sales report for December, though hardly upbeat, was not as weak as anticipated, and prices paid by producers last month were unchanged. This suggests the economy is slowing but not screeching to a halt, and inflationary pressure is still around. Enough reason for the Fed to make sure it doesn't overreact when making the next interest-rate cut. Current expectations of a month-end 50 basis point cut in the
fed funds rate are about half of what they were last week.
The benchmark 10-year
Treasury note lately was down 1 3/32 to 103 22/32, raising its yield to 5.255%.
In economic news, the much-awaited
) report showed a 0.1% rise in December. The forecast of economists polled by
was for a decline of 0.4%.
The latest numbers might check the current talk about economic collapse, but it should be kept in mind that the advance is slight, and it also follows successive drops of 0.5% (October) and 0.1% (November). Moreover, new car sales, which rose a strong 0.3%, helped its progress.
Producer Price Index
), which measures the prices producers pay in the overall production process and is a key indicator of inflation, remained unchanged for December after having risen 0.1% the previous month. But the core PPI, which excludes the much more changeable food and energy components, rose by 0.3%, a substantial increase. So inflation may remain an important consideration in forming the ongoing monetary policy.
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