With little direction from
Federal Reserve chairman
Alan Greenspan in his speech before the
Thursday, investors turned earnings-focused again. And they found themselves wading through a sludge, with several high-tech heavyweights warning about future growth prospects and announcing new job cuts.
Some say the
Nasdaq Composite Index was due for a pullback anyway after putting in an impressive performance so far this year. That downswing on the Nasdaq began Thursday -- when the tech-clogged index lost 3.5% of its year-to-date gains -- and was continuing today. But stocks were seeing weakness across the board.
Dow, which performed better yesterday, tried to launch itself into the green again today but had lately lost its footing and was back in the red. The
S&P 500 was wading in the red.
The communications-equipment stocks were the most battered in techland this morning. Communications equipmentmakers were knocked down by a dire warning from
said orders fell severely in the fourth quarter. The company said the economic slowdown has caused an inventory glut among its customers. Six firms rushed in to downgrade the stock this morning, and some said PMC-Sierra's problems were not stock-specific.
PMC-Sierra was off 27.3%,
was falling 9.1% and
was losing 14%.
But some of the optical stocks were bouncing back, despite a warning about growth prospects from
. JDS said Thursday that growth was
hitting the skids, echoing fellow optical
Wednesday warning. JDS blamed high customer inventory levels and weak customer spending prospects.
But Corning's warning had already inspired a selloff in the sector yesterday. That selloff took Corning down 19%, networking giant
8% lower and former investor favorite
JDS was lately up 5.1% and Corning was down 0.5%. Cisco was falling another 6.8% and Ciena was down 2.8%.
Swedish mobile phone giant
was also falling after it reported a 46% drop in pretax income on a year-over-year basis and a 64% drop in earnings, said it will quit producing its own mobile phones and that it was slashing jobs to save $1.55 billion a year. Ericsson was off 14.9%, and competitor
was falling 1.4%.
took a look at Ericsson's
ugly report and at the repercussions of a growing round of
job cuts. Telecom
is also planning layoffs, the
Wall Street Journal
reported today. The company expects to let go between 10% and 15% of its workforce as part of a restructuring effort.
Not all was lost in tech, with PC maker
, software mammoth
and wireless-communications company
all higher. Qualcomm reported better-than-expected earnings after the close Thursday and fell short of consensus revenue estimates. But it said it is comfortable with analysts' estimates for the current quarter and the year.
The Dow was falling on weakness in diversified industrial
, consumer products giant
, oil driller
and airplane manufacturer
Another Dow component,
, was rising despite missing fourth-quarter earnings estimates by a penny with 70 cents per share. The company has yet to complete its merger with
. The stock was up 0.9%.
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There was a lot of red all of everywhere today and few safe havens. Only airline and drug stocks were leaning upward and just by a hair. The
American Stock Exchange Airline Index
was rising 0.04%, while the
American Stock Exchange Pharmaceutical Index
was lifting 0.6%. The drug stocks got a bit of a rally yesterday after a two-day selloff despite strong earnings reports.
was up 1.5% to $83.13 and
was up 2.5% to $52.25.
Most airline stocks were lower, but
KLM Royal Dutch Airlines
were up 1.8% and 2.4%.
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Treasuries started the day stronger but have slipped lately as dealers indulge in some profit selling or complete other trades within the range. Factory data released this morning indicated further slowing in the manufacturing sector and will have negative implications for the upcoming
gross domestic product
) number next week. For now, the market has settled on hopes of a half percentage-point cut in the
fed funds rate during the Federal Reserve's meeting on Jan. 30 and Jan. 31. Twenty-four out of 25 primary dealers expect that to happen, as reported by
The benchmark 10-year
Treasury note lately was down 1/32 to 103 22/32, yielding 5.253%.
In economic news,
durable goods orders
) rose 2.2% in December, after a 1.8% increase in November. This was contrary to expectations, as economists polled by
had predicted a fall of 1.7%. But the number is subject to much volatility and it was also the high demand for new commercial aircraft that accounted for most of the increase. Excluding transportation equipment, new orders fell 1.4% for the month after having gone up by 0.3% in November. The shipments of finished goods declined for the third straight month.
Help Wanted Index
), which tracks the number of recruiting ads across the country, rose by 4 points to 79 in December.
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