Market Update: Stocks Firmly in the Red in Morning Action - TheStreet

Earnings worries triggered by a number of warnings after yesterday's close and a morning downgrade on

Great Atlantic Pacific & Tea Group

(GAP)

, better known as A&P, were pressuring stocks this morning.

The

Dow Jones Industrial Average was 52 lower to 11,207.

The

Nasdaq Composite Index was down 110 to 3988, falling below the psychologically important 4000 level.

BroadVision

(BVSN) - Get Report

, which was rising in preopen action on news it had entered a deal with tech leader

IBM

(IBM) - Get Report

, was the most active stock on the Nasdaq. BroadVision was lately down 4% to $36.38.

Wall Street is particularly worried now about slowing corporate earnings growth. The last few months of economic data have generally shown a slowing economy, and the season of earnings warning is fast approaching. Companies expecting to miss earnings estimates tend to warn right before quarterly earnings are released, or beginning in early October.

Investors may be afraid that rising crude oil prices will continue to bite into corporate profits, particularly after chemical bellwether

DuPont

(DD) - Get Report

partly blamed oil costs for the profits warning it issued yesterday morning.

"This weakness is part of the soft landing -- worries over corporate earnings. But I've never seen in my young forty years a soft landing work," said Doug Myers, vice president of equity trading at

IJL Wachovia

.

The other major indices were also deep in the red, with the broad market

S&P 500 off 11 to 1491 and the small-cap Russell 2000 off 5 to 538.

TheStreet.com Internet Sector

index was 27 lower to 811.

Sector Watch

Retail stocks were one of the few sectors getting a lift this morning, after

Morgan Stanley Dean Witter

upgraded several clothing retailers, including

TJX Companies

(TJX) - Get Report

,

Limited

(LTD)

and

Abercrombie & Fitch

(ANF) - Get Report

. TJX was 4.7% higher, Limited was up 3.8% and Abercrombie was up 3.7%. The

S&P Retail Index

was up 2.2%.

Commodity-related indices were having a hard time today, as the

Philadelphia Stock Exchange Oil Service Index

was down 2.9% and the

Amex Oil & Gas Index

dropped 1.8%. The

Philadelphia Stock Exchange Forest & Paper Products Index

lost 2.3%.

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Bonds/Economy

The 10-year Treasury note has been relatively volatile this morning, lately up 4/32 at 100 3/32, and yielding 5.737%. Treasuries fell for the third session in a row yesterday as investors reacted to rising oil prices and the upcoming heavy issuance of corporate bonds.

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