Investors would like to forget today's Kodak moment.

On the heels of the

Dow Jones Industrial Average's component

Eastman Kodak's

(EK)

warning that third-quarter profits would fall short of expectations, the blue chip index plunged 177 to 10,631.

This morning, Kodak said that its third-quarter earnings would be 20 cents to 25 cents below its previous estimate, which ranged between $1.56 and $1.66 per share. Analysts had expected the photo giant to come in at $1.60 per share.

Kodak's CFO, Bob Brust, stated that the company had expected strong September sales to offset earnings pressures of the rising dollar, increased raw material costs and higher levels of digital investment. But that didn't happen.

Investors today hammered Kodak's shares, which fell 25.1%, slicing 87 points off the Dow. Analysts hacked their recommendations on the company's stock:

Credit Suisse First Boston

dropped the film company to buy from strong buy and

PaineWebber

lowered its rating to neutral from hold.

Kodak was not the only company to attract negative investor attention during today's session. Dow technology components

IBM

(IBM) - Get Report

, off 2.9% to $119.38 and

Intel

(INTC) - Get Report

, off 4.6% to $45.19 both suffered through a ghastly session.

And even after the Supreme Court handed

Microsoft

(MSFT) - Get Report

a

victory by deciding that its appeal of antitrust violations should first be heard by a lower appellate court, technology stocks were dragged down in late-day action. Although Mister Softee finished up 2.4%, the technology laden

Nasdaq Composite Index -- which spent most of afternoon trading near the flat-line -- gave in to selling pressure in the final hour of trading, ending down 52, or 1.4%, to 3689.

"This is a very nervous market," said Brian Conroy, head of listed trading at

J.P. Morgan

. "Just days away from the end of the quarter, people will sell on pre-announcements."

Indeed, trading during this final week of confession season, when companies warn about any weakness in their upcoming earnings reports, has been very choppy. (

TSC

has been tracking third-quarter

profit warnings in a separate story.)

"Going into the end of the quarter, stocks that are down remain that way," notes Conroy. Amid concerns about the weak euro and high-energy prices eating into corporate profits, investors lack incentive to buy right now.

Warnings from printer manufacturer

Lexmark

(LXK)

, diesel engine maker

Cummins Engine

(CUM)

, baked goods distributor

Earthgrains

(EGR)

, and retailer

Guess?

(GES) - Get Report

all weighed on the market today.

Cough, Cough, Wheeze, Wheeze

Biotech stocks added downward pressure to the Nasdaq today. Shares of

Millennium Pharmaceuticals

(MLNM)

, off 4% to $147.44;

Alexion Pharmaceuticals

(ALXN) - Get Report

, down 7.4% to $105, and

Gilead Sciences

(GILD) - Get Report

, off 8.4% to $106.44, all ended south of the border. Salomon Smith Barney started coverage of several companies in the sector this morning, mostly with outperform or neutral ratings. The

Nasdaq Biotechnology Index

ended off 2%.

Market Internals

Breadth was negative on heavy volume.

New York Stock Exchange: 1,245 advancers, 1,603 decliners, 1.1 billion shares. 92 new 52-week highs, 117 new lows.

Nasdaq Stock Market: 1,417 advancers, 2,592 decliners, 1.79 billion shares. 74 new highs, 227 new lows.

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Most Active Stocks

NYSE Most Actives

  • Lucent (LU) : 26.5 million shares.
  • Motorola (MOT) : 20.3 million shares.
  • Texas Instruments (TXN) - Get Report: 19.3 million shares.

Nasdaq Most Actives

TheStreet Recommends

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Sector Watch

Although oil has come off the 10-year highs it hit last week, trading this afternoon up 18 cents to $31.75, concerns about high energy prices are still on investor's minds. As a result, energy-sensitive transport stocks took a turn for the worse today. The

Dow Jones Transportation Average

was down 1.5%. Additionally, this morning

Donaldson Lufkin & Jenrette

lowered its stock price target and earnings estimates on component

Northwest Airlines

(NWAC)

. Shares of Northwest were down 2.1%.

The

Philadelphia Stock Exchange Semiconductor Index

dropped 1.7%, pulled down by Intel. Shares of

Advanced Micro Devices

(AMD) - Get Report

,

Novellus Systems

(NVLS)

, and

KLA-Tencor

(KLAC) - Get Report

were all down.

Financial stocks also suffered during today's session. The

American Stock Exchange Broker/Dealer Index

was lower 2.1%.

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Bonds/Economy

The Treasury market is narrowly mixed amid stable oil prices and a stronger-than-expected

Consumer Confidence Index.

Oil is well off the 10-year highs it hit last week thanks to the Clinton administration's decision to release some from the country's emergency stockpiles, and that's a positive for the bond market. Rising oil prices make bond buyers stingy to the extent that they threaten to lift the inflation rate.

Meanwhile, consumer confidence remains high in spite of the rise in energy prices, indicating that the adverse impact on growth may be muted. The Consumer Confidence Index rose to 141.9 in September from 140.8 in August. Economists polled by

Reuters

had forecast a smaller rise, to 141.4, on average.

"The reaction of consumers remains a key factor that will determine how recent energy price increases will effect the economy,"

Barclays Capital

economist Henry Willmore wrote recently. "So far it appears that consumers are remaining confident. This will delay and possibly mute the impact of higher oil prices on growth."

The benchmark 10-year

Treasury note lately was up 9/32 at 99 19/32, dropping its yield to 5.804%.

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International

Technology stocks were leading European markets lower, following yesterday's late-afternoon sell-off on the Nasdaq. But the major indices had retreated from earlier lows.

The

FTSE 100

was down 0.70%. Across the channel, the

CAC 40

in Paris was off 0.67% and the

Xetra Dax

in Frankfurt was down 0.69%.

The euro got a boost Friday from the

joint intervention by the European Central Bank, the U.S. and Japan. It was lately trading at 0.8799.

Asian markets were mixed overnight. Both Tokyo and Hong Kong stocks were under pressure.

The

Nikkei 225

index shed 64.28, easing to 15,928.62.

The greenback fell against the yen in Tokyo trading to 107.32. The dollar was lately trading at 107.62 yen.

Hong Kong was dominated by worries about the high-debt burden of broadband and telecom operator

Pacific Century Cyberworks

(PCW)

. The key

Hang Seng

index fell 138.10 to 15,290.85 after PCCW fell HK$0.65, or 7%, to 8.65 ($1.11). An Australian newspaper reported that the company's mobile-phone joint venture with

Telstra

may fall through or be renegotiated.

Elsewhere in Asia, Korea's

Kospi

index rose 2.97 to 587.60, while Taiwan's

TWSE

index gained 71.57, or 1.1%, to 6749.03.

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