The market ended today with traders and investors saying not only Thank God it's Friday, but also Thank God it's the end of the third quarter.
Most major indices ended the day in the red, including the
Dow Jones Industrial Average, the
Nasdaq Composite Index,
S&P 500, the
Russell 2000 and
TheStreet.com Internet Sector
Sure, September is historically a bad month, but this one was particularly grim with
earnings warning after earnings warning, capped off with last night's from (the now) fallen
. The computer maker warned of a significant slowdown in third-quarter earnings and that its shares lost half their value on the news.
Apple, the most actively traded stock on the Nasdaq today, fell 51.9%, or $27.75 to $25.75, cutting the company's former market cap of $17.4 billion in half.
Unlike other boxmakers, which use
software, Apple is more or less an entity unto itself, some
contend. However, a slowdown in revenue can't be good for other PC makers, as
, down only 0.4%, was downgraded several weeks ago on demand-related concerns.
dropped 6.7% and
was 6.5% lower. Those Dow components had a combined drag of about 108 negative points on the index.
sank 7.9% and
This week we learned that earnings warnings can't just be chalked up to company- or issue-specific problems like higher fuel costs, problems with a currency or bad weather -- the reasons cited by companies earlier this month. Apple plainly stated that it saw significant slowing of demand in September, which was the case as well in comments made by
a few days ago.
"The macro outlook continues to have investors pinned down," said Jon Olesky, head of block trading at
Morgan Stanley Dean Witter
. "People are nervous as can be that there's more and more evidence that the economy is slowing at an alarming rate."
Olesky went on to say, "It seems the magnitude of shortfall came in September, and that's what Kodak alluded to."
The mood is gloomy following warnings from
, Intel and
rose 14.6% on merger speculation.
Bank of America
are said to be possible suitors.
Major Indices in the Third Quarter
Major Indices in September
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The American Stock Exchange Airline Index
fell 3.5% thanks to an earnings warning from
. That news also socked the
Dow Jones Transportation Average
, which dropped 2%.The
Philadelphia Stock Exchange Semiconductor Index
was down 5.6% in reaction to the Apple news. Most components were down, including
, off 8.8%,
, down 7.1% and
Philadelphia Stock Exchange Oil Service Index
managed to rise and ended the day up 1.7%.
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Treasuries are stronger thanks to slumping stocks and the calendar, which traditionally favors the Treasury market on the last business day of the quarter. Pressure to own safe, liquid assets for appearance's sake often prompts buying of Treasuries by portfolio managers who report their holdings on the last day of the quarter, bond market analysts say.
The day's most important economic indicator, the
Chicago Purchasing Managers' Index
chart ), was stronger than expected. It rose to 51.4 in September from 46.5 in August, indicating renewed expansion in the manufacturing sector.
The benchmark 10-year
Treasury note was up 4/32 at 99 18/32, dropping its yield to 5.808%.
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European markets were generally weak. In London, the
was off 30.1 to 6294.2. Across the channel, the
in Paris was 44.40 lower to 6266.63, and the
in Frankfurt lost 57.01 to 6775.75.
Asian markets jumped on Friday as U.S. markets recovered overnight, but most traders are viewing the bounce as a one-time event.
In Japan, local fund managers buying selected tech shares before the close of the fiscal first-half Sept. 30 helped the
index rise 120.30 to 15,747.26.
index bounced 233.23, or 1.5%, to 15,648.98 as property and banks shares rallied.
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