Yup, you guessed it: More uncertainty about the earnings outlook was giving the stock market another beating this morning. In what has become a familiar pattern on Wall Street, the
Dow Jones Industrial Average took a dive soon after the open, while the
Nasdaq Composite Index racked up its own losses.
On the heels of the lowest close on the Nasdaq since Oct. 30, 1998, the tech-heavy index was lately below 1750, another benchmark level. A day after the end of the first quarter, a late batch of confessions hit the marketplace last night. Most likely, the companies that warned had been hoping, if only desperately, that end-of-the-quarter sales would allow them to match more optimistic estimates.
Yesterday's roster of profit warnings included B2B play
, down 16.4% to $5.44, networker
, off 8.7% to $10.67, Internet infrastructure software developer
, behind a whopping 38.1% to $3.84, and e-services firm
, lower by 18.6% to $7.94.
Market internals were atrocious this morning: Recently, decliners were leading advancers on
New York Stock Exchange by more than 2-to-1, while losers outnumbered winners on the Nasdaq by more than 3-to-1. Trading volume was light, as apparently, many investors are thinking twice about playing the market.
If this latest round of earnings news is any indication about the future, there are probably lots more companies with last-minute disappointments up their sleeves. According to market experts, until the earnings picture brightens, the stock market outlook will darken. This morning,
Salomon Smith Barney
cut its 2001 year-end target for the Dow to 11,400 from 11,750. The
blue-chip index closed down yesterday to 9778. But Salomon analyst Tobias Levkovich upped his equity rating to 70% from 65%.
Also weighing on today's market is tension overseas. Today marks day three of the standoff between China and the U.S. over an American spy plane being held in China. Chinese President Jiang Zemin is asking the U.S. to accept full responsibility for the collision between a Chinese fighter plane and the U.S. plane and to halt surveillance missions near China's coasts.
For some good news, energy powerhouse
was one of the few bright spots. It was up 2.6% to $39 after announcing that first-quarter operating earnings would come in 10% to 15% above the high end of analysts' estimates. Entergy on Monday said it had abandoned a planned merger with
And electronics retailer
, soaring 12.8% to $41.51, beat first quarter targets by 7 cents per share, coming out with earnings of 89 cents per share.