The bloodletting has begun.
There were few pockets of safety today, with an across-the-board selloff under way.
Yesterday's speech to the
Federal Reserve chairman
Alan Greenspan didn't do much to help encourage investors who were looking for some hint as to what the Fed's going to do next week.
So, investors focused their attention again on earnings news -- and too much of that was negative.
Nasdaq Composite Index had made some impressive gains since last week, but with so many companies reporting less-than-stellar earnings and a good number of them lowering forecasts, there wasn't an incentive to rally. The Comp has spent the morning in the downside.
Dow Jones Industrial Average has fared no better today. Lately, the index was giving back much of the gains it made in Thursday's trading action.
Communications-equipment stocks took the Nasdaq down yesterday, and they were doing it again today. The spark that started the fire was 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 plummeting 27.2% to $69.88, and was one of the most actively traded stocks on the Nasdaq.
Others were suffering in sympathy.
was falling 9.8% and
was losing 12.8%. And a couple of PMC-Sierra's customers were getting hit right along with them, including
, down 7% and 1.3%, respectively.
But optical stock
was bouncing back, despite warning Thursday that growth was
hitting the skids, echoing fellow optical
Wednesday warning. JDS blamed high customer inventory levels and weak customer spending prospects. Corning's pain was continuing today, but not quite as severely as yesterday's 19% drop. In recent trading, the stock was down 1.3% to $55.50.
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. In addition, the company 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 16.4%%, and competitor
was falling 2.2%.
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 and Dow component
, 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
and home improvement retailer
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There wasn't much playfulness going on in the market today. Only drugs and bankers were looking like they were having any kind of fun.
American Stock Exchange Pharmaceutical Index
was 0.9% higher, after seeing many of its components report mixed earnings this past week.
, which reported earnings in line with estimates yesterday, was lately the victim of profit-taking and was down 2.2%. But component
was getting a nice bounce, up 2.6%, on news that Uprima, its treatment for erectile dysfunction got a nod from the
Committee for Proprietary Medicinal Products.
Philadelphia Stock Exchange/KBW Bank Index
was jumping 0.2% ahead of an expected interest rate cut from the Fed next week. The only thing disputed about the cut is how much it'll be -- 25 or 50 basis points.
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Treasuries started the day stronger but have slipped lately as dealers indulge in some profit-taking 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 30-31. Twenty-four out of 25 primary dealers expect that to happen, according to
The benchmark 10-year
Treasury note lately was down 3/32 to 103 17/32, and yielding 5.274%.
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, moreover, high demand for new commercial aircraft 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. Shipments of finished goods declined for the third straight month.
), which tracks the number of recruiting ads across the country, rose by 4 points to 79 in December.
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