Updated from 4:07 p.m. EDT
Stocks ended another sluggish session with losses as concerns over corporate earnings growth and violence abroad kept buyers at bay Wednesday.
Dow Jones Industrial Average dropped 58.54 points, or 0.6%, to 9923.04. The
Nasdaq lost 27.78 points, or 1.7%, to 1624.39, and the
S&P 500 was off 6.89 points, or 0.6%, at 1067.66.
The big story of the prior session, the midquarter conference call from chip-equipment maker
, failed to energize investors despite some optimistic comments from the company.
Novellus raised its outlook for second-quarter orders to $275 million, up from previous guidance of $250 million. The company also increased its quarterly earnings estimate by 2 cents to 8 cents a share, a penny above Wall Street's estimates, but left its revenue forecast unchanged at $220 million. Novellus said nothing to alleviate investor concerns about the second half of the year, restricting comments to the current quarter. The company's shares ended the day down 7% at $43.40. Other chip-equipment makers also traded to the downside.
Companies connected to the energy sector remained in the spotlight, and again investors were unloading their holdings. Oil services company
announced that the
Securities and Exchange Commission
has launched a preliminary investigation into how the company accounts for cost overruns on construction jobs. Halliburton told the SEC it would cooperate fully with the investigation. Shares fell 3% to $18.72.
Separately, utility company
saw its shares sink 23% to $27.01 after the company lowered its 2002 and 2003 profit forecasts because of a decline in revenue at its energy trading unit. The company said it would probably cut half of its trading staff and shift investment in energy trading to its core natural gas operation. Subsequently, UBS Warburg downgraded the stock to a hold rating from a strong buy.
Another energy company,
, which last week lost its chief executive after the company admitted to bogus energy trades, said it would sell its global oil and gas exploration properties in a bid to strengthen its balance sheet. Shares of CMS were down 3% to $18.05.
At the top of the earnings docket was
, which easily beat analysts' forecasts. The homebuilder posted a profit of $52.5 million, or 69 cents a share, compared with $45.8 million, or 58 cents a share, a year earlier. Analysts were expecting the company to earn 62 cents a share. Revenue for the quarter rose 8.4% to $539.1 million from $497.6 million. Toll dropped 3% to end at $29.30.
On the research front, Merrill Lynch raised its investment rating on
to strong buy from buy based on strong retail sales momentum, sending shares of the coffee chain up 4% to $23.
In the biotech sector,
plunged 21% to $19.25 after Morgan Stanley downgraded the stock to an underweight rating from an overweight rating. The firm also trimmed its revenue estimates for CV's ranolazine drug, a treatment for chronic chest pain.
Meanwhile, gold prices soared above $325 an ounce in Europe this morning, their highest level since October 1999, due to the weakening U.S. dollar and escalating tensions between India and Pakistan. Still, shares of mining companies
closed lower. The Philadelphia Stock Exchange Gold and Silver Index lost 3.2%, but earlier in the session the measure hit a 52-week high.
U.S. Treasury issues were stronger across the board at 4 p.m. EDT. The 10-year note was up 16/32 at 98 18/32, yielding 5.06%.
European markets were mixed. London's FTSE 100 gained 0.2% to 5083, and Germany's Xetra DAX lost 0.8% to 4882. In Asia, Japan's Nikkei 225 fell 0.7% to 11,853, while Hong Kong's Hang Seng finished down 1.3% to 11,431.