Computer error can be held up as the instrument that soured investors on the stock market Friday; today it was that more insidious of villains -- apathy.
Volume was spare and buying interest was light for the bulk of today's trading session. Investors latched onto profit warnings from a couple of second-tier technology companies and took down stocks on a day when nobody much wanted to get in on the action. Expected earnings warnings should tussle with investors' faith in a second-half recovery to keep stocks going nowhere for a good long while.
Investors attempted to prop up the flailing indices with a round of buying in the last hour of trading, but the
Dow Jones Industrial Average still finished down 54.91 to 10,922.09, while the
Nasdaq Composite Index dropped 44.4 to 2170.7 and the
S&P 500 lost 10.57 to 1254.39. Volume was practically nonexistent -- the fully
New York Stock Exchange mustered barely 850 million shares and the
Nasdaq Stock Market counted fewer than 1.4 billion shares on the session.
Most sectors, save for utilities, ended the day below the flatline. The brunt of the damage today was in the technology arena. Friday's warning from
also continued to weigh on the market. Juniper lost 7.1% today.
Today's culprits were
, which makes optical units for use in chipmaking. Both stocks told of worsening expectations for the second half of the year. Varian lost 7.6% and DuPont dropped 11.6%.
There are mounting expectations for a tidal wave of warnings during this second-quarter confession season, when companies let the market in on what it knows already -- things weren't too good this quarter.
And even though it's supposed to know that already, that doesn't mean investors won't get jittery, and stocks won't decline as a matter of consequence. But traders and analysts interviewed today don't foresee a shift in sentiment, just an opportunity to take profits and perhaps indicate the market will spend a few months going nowhere.
"These are just excuses to take profits," said Jack Shaughnessy, chief investment strategist at
. "We've had a nice spring rally, so people are taking profits because of uncertainty. But it's just an excuse -- what we want to see are signs of the economy perking up."
But signs of the economy perking up are spare indeed, though it's been the standing mantra of the stock market during its recent spring rally that things will get better, mostly because of the
Federal Reserve's interest-rate cuts. There are a few important reports coming this week, including monthly retail sales figures out Wednesday.
It's been nearly a month since the market took a breather from its month-and-a-half long rally. Stocks have mostly been casting about, as investors look for a reason to boost prices. The spring rally was built on expectations for lower interest rates and the subsequent improvement in the economy; it's gotten the former, but still not much evidence of the latter.
The market is "not going to make another sustained move upward until it doesn't need to depend on the Fed," said Tony Cecin, manager of Nasdaq trading at
U.S. Bancorp Piper Jaffray
. "A lot of the comments I've been hearing have been speculating on the
June 26-27 Fed meeting."
Already the market's contended with warnings from
J.P. Morgan Chase
Investors are perfectly happy to accept another month of trading similar to days like the last few, where the various sectors push higher for a few days, fall back, wash, lather, rinse, repeat. Broadly, the market continues to operate under the two same principles -- as long as things don't get worse, they can get better, and more Fed cuts will help everybody.
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European stocks ended lower today. London's
fell 90.1 points to 5860.5. The
in Paris slipped 21.5 points to 5418.5. And Frankfurt's
lost 24.47 points to 6162.74.
The euro was lately trading at $0.8432. The dollar was trading at 121.97 yen.
Stocks tumbled in major Asian markets overnight. Tokyo's
closed down 203.74 points, or 1.52%, to 13,226.48 as investors fretted over weak data on the nation's gross domestic product growth and tech earnings worries in the U.S. The Nikkei is now trading just above an eight-week low that was hit last Tuesday. Hong Kong's
closed down 133.40, or 0.97%, to 13,675.49.
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