Updated from 4:04 p.m. EDT
Tech shares ended lower Friday, as tepid earnings guidance from
and several other companies had investors taking profits. Blue-chips also ended down following renewed safety concerns at U.S. airports.
Dow Jones Industrial Average
fell 70 points, or 0.7%, to 9722, while the
fell 38 points, or 1.9%, to 1912. The
fell 11 points, or 1%, to 1039. The benchmark 10-year Treasury note rose 17/32 to yield 4.39%.
"Overall the market continues its pattern of sharp upside breakouts, pulling back to support, and the slowing advance after the pullback to consolidate the gains made by the breakout," said William Livesey, senior technical analyst at CyberTrader. "This type of action results in continued higher highs as well as higher lows, which is a bullish indicator."
Media reports said suspicious items were found on two
planes Thursday night. Reports said the items were found inside small plastic bags and included various box cutters. Southwest said the packages came with a note that said they were left as a challenge to security procedures, according to media reports. Southwest shares finished down 1.4%, or 26 cents, at $18.36.
, meanwhile, fell 85 cents, or 4.3%, to $18.80.
In economic news, the University of Michigan's consumer sentiment index rose to 89.4 in October from last month's reading of 87.7. Analysts expected a reading of 88.2. Separately, the Commerce Department said housing starts rose 3.4% to an annualized rate of 1.888 million in September from last month's revised figure of 1.826 million. The results topped analysts' estimate of 1.827 million. Building permits declined 2.2% to a 1.86 million rate from August's revised 1.901 million, but still beat expectations for 1.835 million.
Volume was 1.29 billion trades on the
New York Stock Exchange
and 1.73 billion trades on the Nasdaq. Losers beat winners on both indices by a margin of about 3 to 1.
The Dow is up 47 points, or 0.5%, from last Friday's close of 9675, and the Nasdaq is relatively flat from its close of 1915 last week. The S&P 500 is also flat from its close of 1038 last Friday.
Bernadette Murphy, chief market analyst at Kimelman & Baird LLC in New York, said Friday's declines were due in part to
muted guidance earlier in the week. She also noted that Friday was an options expiration day.
Murphy added, "This may just be a period of consolidation. We had been getting some really good earnings reports, and economic data has been good. We've had a good run here. September and October are usually bad, but we've reached a new high."
A deluge of tech-related earnings came out after Thursday's close, including results from online auctioneer eBay. The company said third-quarter earnings rose 69% from a year ago on more than a half-billion dollars in revenue. But eBay also warned that 2004 earnings estimates are too high. The shares finished down $2.64, or 4.6%, at $54.86. eBay was cut to underweight from equal weight at Pacific Growth.
One of Friday's biggest decliners was security software company
, which ended down $3.37, or 20%, at $13.51. The company posted a solid third quarter but warned that fourth-quarter revenue is likely to be $63 million to $67 million, the low end of which would trail current revenue forecasts. Soundview downgraded RSA to underperform from neutral.
Online advertising facilitator
tanked $2.98, or 24%, to $9.26 after saying third-quarter revenue totaled $74.8 million, about $1 million below analysts' consensus forecast. Net income was $6.3 million, or 4 cents a share, compared to a loss of $62 million, or 46 cents a share, a year earlier.
narrowed its quarterly loss, posted a rise in revenue and raised its fourth-quarter sales guidance. The company, however, was cut to sell from hold at Smith Barney, and shares ended $2.84 lower at $30.20, a decrease of 8.7%.
Advanced Micro Devices
gained 3 cents, or 0.2%, to close at $13.99. The company said third-quarter sales were $954 million, up 48% from a year ago and close to $100 million better than analysts' estimates. Still, shares of AMD were downgraded at Soundview to neutral from outperform. Deutsche Bank, however, upgraded AMD's shares to hold from sell and lifted its target price to $15 from $16.
said third-quarter net income was $1.10 a share, beating analysts' expectations on a 4.6% jump in sales. The company forecast fourth-quarter earnings of $1.75 to $1.85 a share, slightly below the consensus estimate, but said the outlook might not be completely comparable with analysts' estimates, which are currently at $1.90 a share. Shares fell to $60.68, down 3.9%, or $2.44.
lost $57.1 million, or $1.48 a share, from continuing operations in its latest quarter, almost twice the 88-cent loss estimate compiled by Thomson First Call. Shares dropped 65 cents, or 9.1%, to $6.50.
Overseas markets ended mixed, with London's FTSE 100 closing up 0.1% at 4344, while Germany's Xetra DAX ended down 1.7% at 3517. In Asia, the Nikkei rose 0.1% to 11,038, and Hong Kong's Hang Seng rose 0.1% to 12,044.
The dollar was weaker against the yen and euro.