Market Update: Earnings Concerns Put Pressure on Stocks - TheStreet

(Updated from 4:04 p.m. ET)

A fresh round of profit warnings spooked investors today -- and concerns about how the week might shake out also rattled investors.

Two trading days after

Intel

(INTC) - Get Report

soothed investors with a confirmation about its second-quarter projections, a host of smaller chip companies reminded them a recovery in the sector isn't necessarily under way.

Varian Semiconductor

(VSEA)

this morning lowered its revenue outlook for the third quarter because of continued weakness in the industry. The firm cut 20% of its workforce.

DuPont Photomasks

(DPMI)

cautioned that fourth-quarter results would be below expectations and eliminated 6% of its staff. The

Philadelphia Stock Exchange Semiconductor Index

, or SOX, fell 3.4%.

Chip stocks weren't alone on the downside. The

Nasdaq Composite was lower by 44, or 2%, to 2171. Still, it came off its lows of the day. The

Dow Jones Industrial Average, also off its lows, lost 55 to 10,922. Intel was among the stocks putting pressure on the

blue-chips, dropping 1.1% to $30.33. Drug company

Merck

(MRK) - Get Report

slipped 2.7% to $72.25.

The broader-market

S&P 500 shed 11 points to 1254. Among market sectors, networking, drug, cyclical, retail and Internet stocks fell. Oil and utility stocks rose, but only modestly.

There was no major news driving the market today, and trading volume was very light.

The Warnings Watch

Today's confessions come on the heels of a downbeat second-quarter revenue forecast from

Juniper Networks

(JNPR) - Get Report

on Friday before the market opened. The warnings have Wall Street worried about the corporate bottom line. "Maybe investors got ahead of themselves by pricing in an optimistic scenario for the warnings season. And now, they're hedging their bets," said Peter Coolidge, managing director of trading at

Brean Murray Foster Securities

.

Investors were buoyed for most of last week by optimism about corporate earnings, but the major indices racked up losses on Friday -- and followed through with more losses today. "The Juniper news more than upset the positive effect of Intel's statement," said Coolidge. Last Thursday, chipmaker Intel confirmed it was on track to meet earnings and revenue estimates for its current quarter. Other companies with recent good news on the earnings front include telecom-equipment provider

Lucent

(LU)

and communications-chip maker

Xilinx

(XLNX) - Get Report

.

But Juniper has plenty of company in the confessions department, including

Sun Microsystems

(SUNW) - Get Report

,

Hewlett-Packard

(HWP)

,

J.P. Morgan Chase

(JPM) - Get Report

and

Handspring

(HAND)

.

Electronic-manufacturing service companies were trading lower today after a downgrade from

Merrill Lynch

. The firm cut its recommendation on

Celestica

(CLS) - Get Report

,

C-Mac Industries

(EMS)

,

Jabil Circuits

(JBL) - Get Report

,

Sanmina

(SANM) - Get Report

and

Solectron

(SLR)

. The stocks each lost more than 5% today.

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