Updated from 4:05 p.m. EST
Stocks finished lower Tuesday, led by a late selloff in technology shares as investors booked profits following disappointing sales numbers from
, negative comments from analysts and reports of a massive writedown at
Dow Jones Industrial Average closed down 12 points, or 0.1%, at 8474. The
Nasdaq fell 19 points, or 1.4%, to 1374, and the
S&P 500 fell 4 points, or 0.4%, to 896.
"We're seeing some slow trading," said Giri Cherukuri, head trader at Oak Brook Investments, who attributed the slowed activity to the lull between third-quarter earnings and fourth-quarter preannouncement season. Indeed, the major averages have been in a relatively narrow trading range over the course of the last week.
In Treasuries, the 10-year note was up 3/32 to yield 3.98%. The 30-year bond was up 3/32 to yield 4.86%.
Among individual sectors, retail, home improvement, building materials, wireless, semiconductor, networking, telecom equipment and airline issues were all under pressure, while defense, oil drilling, consumer products and beverage stocks were stronger.
The Dow Jones U.S. Retail Index fell 3%, the Philadelphia Semiconductor Index, or SOX, lost 2.3% and the Amex Networking Index shed 2.7%. Overall, market breadth was negative. Decliners outpaced advancers 10 to 7 on the
New York Stock Exchange, as 1.33 billion shares changed hands. On the Nasdaq, losers beat winners 10 to 7 on volume of 1.59 billion shares.
"I think sentiment has picked up a little bit," Cherukuri said. "Things aren't as negative as they were three months ago, when the market was going down every single day. I think you might see some support or you might see the market build a little bit from here."
Several retailers were in the headlines, including
, which posted earnings before the opening bell. The seller of home improvement goods matched analysts' earnings expectations, but revenue was shy of the consensus estimate.
The Atlanta-based company posted a third-quarter net profit of $940 million, or 40 cents a share, up from the $778 million, or 33 cents a share, it earned in the year-ago period. Revenue increased 9% to $14.5 billion, vs. the $15 billion consensus estimate, and comparable-store sales fell 2%. The company did reaffirm its fourth-quarter targets, but said it was remaining cautious on the outlook for the economy next year. The shares were pummeled on the outlook news, dropping 12.4% to $25.05.
Other retailers were also reporting their quarterly results. Kitchenware and home goods retailer
topped estimates by 3 cents in the latest quarter, as profit more than tripled due to successful cost-cutting measures and steady demand for home furnishings. The company also raised guidance for the full year, saying it now expects to earn $1 to $1.02 a share. Its shares responded accordingly, trading up 1.5% to $23.70.
reported lower third-quarter earnings but managed to top analysts' expectations by a penny. The company posted net income of $23.4 million, or 33 cents a share, reversing a year-ago loss of $33.5 million, or 46 cents a share. Excluding charges related to store closings, executive severance, asset impairment and interest accrual related home decorator
, the company said it earned $26.6 million, or 38 cents per share. BJ's said it expects fourth-quarter sales at stores open at least a year to come in flat and that November sales are running slightly below plan. The company also lowered its outlook for fiscal 2004. As a result, the stock tumbled nearly 17% to $18.36.
Office supplies giant
reported a 40% spike in third-quarter earnings, beating the consensus by 3 cents, as the company posted record sales and earnings on the strength of its delivery business and improved margins. Looking forward, the company said it remains comfortable with analysts' average fourth-quarter earnings estimate of 32 cents a share. The shares surged 13.6% to $18.39.
Meanwhile, Old Economy stalwart General Electric was also in the news after
The Wall Street Journal
reported that the company might be facing a $1 billion to $2 billion charge, in part to boost reserves at its Employers Reinsurance unit and for restructuring. Separately, Salomon Smith Barney cut its 2003 earnings estimates on GE and lowered its price target on the stock to $30 from $32. Subsequently, Moody's cut its senior debt ratings on GE's global insurance unit citing its "continued poor performance." Nevertheless, shares of the Dow component ticked up 30 cents to $23.90.
Several other big downgrades were making their way through the market. Among them, Raymond James lowered its rating on software giant
to market perform from outperform, citing the company's valuation. And Bear Stearns downgraded online bookseller
to peer perform from outperform, based on its belief that the stock trades at a real premium to traditional retailers and companies like
. Microsoft finished the session down 1.5% at $54.83, while Amazon slipped 5% to $21.29.
Bear also issued a note on storage equipment, saying price declines could accelerate to 50% based on feedback from
at the Comdex conference in Vegas. This would be much steeper than the usual 20% to 30% declines. The firm believes this could put pressure on
Elsewhere, Credit Suisse First Boston lowered its rating on the wireless equipment group and Salomon cut its rating on
In the telecom sector,
completed the spinoff of its broadband unit and executed a 1-for-5 stock split. And local phone company
said last night that it expects 2003 revenue to show a low single-digit decline in an otherwise vague conference call, sending its shares down 1.3% to $25.26.
On the economic front, the
consumer price index was in line with expectations, and the trade deficit was a little wider than analysts anticipated. The CPI for October rose 0.3%, as expected, due in part to higher energy prices, and the core reading rose 0.2%, also as expected.
Overseas, Europe's markets sustained losses across the board, with London's FTSE 100 down 0.5% to 4096 and Germany's Xetra DAX losing 1.3% at 3177. In Asia, Japan's Nikkei rose 0.2% to 8365, while Hong Kong's Hang Seng closed up 0.5% at 9965.