Updated from 4:07 p.m. EDT
Stocks made a late push from their session lows but still ended in negative territory Wednesday as profit warning from
J.P. Morgan Chase
proved too much to overcome.
Dow Jones Industrial Average closed down 35.10 points, or 0.43%, to 8172.45. The
Nasdaq lost 7.81 points, or 0.62%, to 1252.13, and the
S&P 500 fell 4.04 pionts, or 0.46%, at 869.48.
Among sectors, tobacco, gold, and utilities were pockets of strength, while software, banks, networking and computer hardware issues ended lower. Decliners outpaced advancers 9 to 7 on both the
New York Stock Exchange
and the Nasdaq.
Two economic reports were released before the start of trading. The Commerce Department said the nation's
international trade deficit narrowed to $34.6 billion in June from $37.2 billion in May. Economists were expecting the trade gap to come in at $37 billion.
Separately, the Labor Department released its
consumer price index, a key measure of inflation, which revealed a 0.3% increase in August, compared with a 0.1% rise in July. Excluding the volatile food and energy sectors, the CPI still rose 0.3%, up from its 0.2% gain the previous month. Economists were expecting a reading of 0.2% for both.
Preannouncement season heated up. Tuesday night, J.P. Morgan Chase warned that third-quarter earnings would be significantly lower than its second-quarter operating profit, citing bad loans to telecommunications and cable operators and weaker-than-expected trading volume. Shares of the Dow component were hammered early then steadily climbed back, and eventually finished lower by 5.2% to $20.44on the
New York Stock Exchange.
( EK), also a Dow component, affirmed its third-quarter and full-year earnings guidance. The company said it expects to earn $1.35 a share to $1.75 a share for the second half of 2002 and 70 cents to 80 cents a share in its current third quarter, before one-time items. Analysts were predicting the company would earn 70 cents a share for the quarter. Kodak earned 52 cents a share in the year-ago period. The stock advanced 2.8%.
Software giant Oracle said after the close Tuesday that first-quarter profits fell due to the worldwide IT spending slump. The Redwood Shores, Calif.-based company posted net profit of $386 million, or 7 cents a share, matching analysts' forecasts. The results exclude a charge related to its investment in
Looking forward, the company said second-quarter results would come in at the low end of the forecasted range. The guidance, offered on the company's conference call, implies sales of $2.23 billion to $2.30 billion, and earnings per share of 8 cents to 9 cents. "Visibility beyond the upcoming quarter is minimal, but we continue to believe that we will see year-over-year improvements," the company said. Subsequently, several brokerages trimmed their estimates on the stock. Oracle's shares were traded down 9.2% to $8.32 on the news.
"There's likely to be more cautionary shots fired the next few days, making for treacherous trade on the long side short-term," said Jay Shartsis, director of options trading for R.F. Lafferty, in his daily trading diary.
( BSC) posted fiscal third-quarter earnings that topped Wall Street estimates by a penny, citing the strength of its bond operations and a ramp-up in customer trading. The New York-based firm posted net income of $164.4 million, or $1.23 a share, compared with $134.6 million, or 95 cents a share, in the year-ago quarter. Its shares climbed 1.6% to $60.43.
Red Hat Networks
( RHAT), which develops Linux computer software, posted a second-quarter loss of $1.7 million, or a penny a share, in line with analysts' expectations, compared with $55.4 million, or 33 cents a share, in the year-ago period. Revenue for the quarter came in at $21.2 million, weaker than anticipated. Shares slipped 6.6% to $5.22.
The trust that controls
has officially ended its search for a buyer. It reportedly received a $12.5 billion offer from
( WWL) last night but, at the last minute, decided against any sale of the candy maker. The stock plummeted 11.9% to $65.
In retail, sneaker giant
said first-quarter profits rose thanks to its strong performance in overseas markets. The Beaverton, Ore.-based company said it earned $217.2 million, or 81 cents a share, before an accounting change in the quarter ended Aug. 31, up from $204.2 million, or 75 cents a share, a year ago. The results bested analysts' consensus estimate by a penny. Sales rose 15% in Europe and 24% in the Asia Pacific region, while managing only a 2% increase in the U.S. Its shares traded up 3.2% to $43.05.
In the pharmaceutical space,
( SNUS) saw its shares rise 4% to $2.20 after announcing successful results of a phase II clinical trial.
U.S. Treasury issues were lower, with the 10-year down 5/32 at 104 13/32, yielding 3.84%.
Overseas markets were lower, with London's FTSE 100 finishing lower by nearly 4% at 3865.4 while Germany's Xetra DAX plunged 5% at 3126.4. Japan's Nikkei 225 fell 0.8% to 9472.1, while the Hang Seng closed down 2.4% to 9474.1.