Continued malaise about earnings, following a new spate of yucky news overnight from tech bellwethers, kicked the market into a puddle this morning at the open. Much of Wall Street was hoping that as earnings season kicked off, companies would show investors how wrong they were to be concerned about third-quarter earnings. No such luck thus far.
Nasdaq Composite Index tore into the red at the open, but was lately creeping backward unsteadily. Still, it is now over 36% off its early March high and even lower than its previous low for the year of 3164.5.
Dow Jones Industrial Average was trying to shrug off the weakness in tech stocks
as well as brokerage
, which, together, were biting almost 50 points out of the blue-chip index.
can take much of the blame for the Nasdaq's droop.
Tech infrastructure company Lucent warned last night that earnings would be 25% to 29%
lower than expected. And Internet titan Yahoo! expressed concern over the weak euro and future sales growth last night, despite decisively beating earnings estimates.
said this morning that it had lowered its earnings guidance for this year and next. The company reported earnings
in line with estimates last night.
All things tech and telecom were taking the news badly, as investors began to fear that no one in the neighborhood would be spared. Internet and networking stocks, obviously, as well as hardware-makers and semiconductors, were all in the dumps.
Semiconductors were already in deep water after
Salomon Smith Barney
yesterday downgraded chipmakers
. The negative comments helped slice a hefty 10.1% off the
Philadelphia Stock Exchange Semiconductor Index
, known as the SOX. The SOX was lately down 1.8% to 693.6.
Financials were getting hurt on continued worries that poor underwriting in the third quarter hurt earnings in the sector.
Morgan Stanley Dean Witter
, rumored to have seen losses in the junk-bond trading unit last week, continued to get hit, off 2.8% to $72.44. The
American Stock Exchange Broker/Dealer Index
was off 2.7%.
and Lehman Brothers
were also weaker.
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Retail stocks weren't having any fun after
warned that its earnings would not make estimates due to softer-than-expected sales and bigger-than-planned markdowns. Investors were concerned that a slowdown in consumer demand and (warning -- here comes another "blame the weather" excuse) a mild summer would have hurt retail sales. But retail stocks have been in the dumps pretty much all year. The
S&P Retail Index
was off 1.1% to 780.1.
Energy stocks continued their recent rally on the back of soaring oil prices. Oil has now retraced nearly half of the 18% decline it had from Sept. 21 to Sept. 28. The
American Stock Exchange Oil & Gas Index
was up 2.1% to 554.9, the
American Stock Exchange Natural Gas Index
was 2.3% higher to 236.3 and the
Chicago Board Options Exchange Oil Index
was up 1.98% to 327.98.
Tobacco, drug and paper stocks were getting some of the runoff from selling in tech and financials.
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The Treasury market was mixed this morning on little news. Intermediate-maturity issues were getting some support from declining stock prices, although that support has eroded as stocks have come off their early lows.
But the 30-year bond is lower in reaction to the latest rise in oil prices, because of the potential for higher energy prices to push the overall inflation rate higher.
The benchmark 10-year
Treasury note lately was up 9/32 at 99 29/32, dropping its yield to 5.764%.
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