An indication from Federal Reserve Chairman Alan Greenspan that the central bank would likely lower interest rates swept investors off their feet yesterday. But clear signs that corporate profits are slowing brought them swiftly back to the ground today.
Bank of America
warned that fourth-quarter earnings would fall below analysts' expectations because of higher credit costs and slowing capital markets.
The company, which runs the largest bank in the U.S., said it expects fourth-quarter earnings of about $1.4 billion, or 85 cents to 90 cents a share, compared with earnings of $1.23 a share in the same period last year. The current
First Call/Thomson Financial
calls for fourth quarter earnings of $1.17 a share. Bank of America traded down 7.7% to $38.
warning. The company said it expects to
miss its fiscal first-quarter sales and earnings targets. As is usually the case, analysts came out the day after to trim their recommendations on the stock.
Credit Suisse First Boston
all got in on the action today. Today, Apple was down 15.8% to $14.31.
And if Apple's bad news wasn't enough to hurt PC-makers
, a negative note from CSFB surely did the trick. Shares of Gateway dropped 10.4% to $16.82, while Compaq fell 17.6% to $20.10.
Also this morning, chipmaking giant
had a crummy note issued last week from
Salomon Smith Barney
reiterated today. The note from Jonathan Joseph said, "All our inputs suggest Intel's Q4 is shaping up to be its worst quarter in over a decade." Last week, Solly reduced Intel's EPS and revenue estimates. The stock dropped 11.6% to $31.81.
was inflicting great pain upon the Comp. The stock sunk 10.1% to $140.31. Today, its partner in a mobile Internet-network joint venture, Finnish mobile-phone maker
, said it has sold 10.4 million shares of the Juniper stock it bought before Juniper's IPO in June 1999.
On the Dow front, the blue-chip index gave back a good chunk of the gains it made in yesterday's session.
was the leading loser on the Dow, followed by Intel. Nearly every component of the blue-chip index was trading deep in negative territory. Pockets of strength included telecom stocks
, up 1.5%, and
, ahead 1.5%.
Elsewhere on the
was up 3.3% on news that it was picking up former
executive Robert Nardelli as its new CEO.
Oil-related stocks fell again today as oil prices continue to tumble, hitting prices not seen since early August. The
American Stock Exchange Oil & Gas Index
was 1.6% lower, while the
Philadelphia Stock Exchange Oil Service Index
was off 1.3%. Blue-chip
, the country's largest oil company, was down 2.4%.
TheStreet.com Internet Sector
fell 5.9% on the heels of yesterday's advance and amid today's technology selloff.
dropped 8.1% and
shed 14.5%. Today, Yahoo! announced that it was looking for a new person to head up sales to help push up its sagging ad revenue.
Philadelphia Stock Exchange Semiconductor Index
decreased 4.5% to 580.1. In recent action, shares of
-- which issued a profit warning on Monday -- fell 8.2% to $40.
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Treasuries were getting a lift from the downturn in stock prices. The rally pushed yields down to new lows for the year.
The benchmark 10-year
Treasury note lately was up 25/32 at 103 6/32, dropping its yield to 5.324%.
Falling stock prices increase the appeal of bonds as an alternative investment. They also indicate waning confidence in the economy, calling for lower interest rates and higher bond prices.
Yesterday, Treasuries staged a huge rally in response to remarks by
Alan Greenspan, in which he acknowledged that the economy is at risk of slowing too much. Presumably, the Fed will lower interest rates in the next several months to keep that from happening.
Today's economic data, while not market-moving, was marginally negative for Treasuries. Mortgage activity increased, according to the
Mortgage Applications Survey
), forecasting increased consumer activity generally. And third-quarter
productivity and unit labor costs
) were revised lower and higher, respectively.
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