Updated from 4:05 p.m. EDTTech stocks sold off Thursday as investors -- battered by two weeks' of uneven earnings news -- were further rattled by worrisome economic data. The selling spread to the Dow, where GM ( GM) lost 6.8% on word of an SEC investigation. The Nasdaq Composite, down 4% in October already, lost another 36.24 points, or 1.73%, to 2063.81. The Dow Jones Industrial Average tumbled 114.87 points, or 1.11%, to 10,230.11 -- its fourth triple-digit swing in seven sessions. The S&P 500 lost 12.48 points, or 1.05%, at 1178.90. "The market was put up for sale today," said Jay Suskind, head of institutional equity trading with Ryan Beck & Co. "Tech, which has held up well lately, had its time to sell. With everything mixed into an already nervous market, there weren't any buyers around." The selling in technology was difficult to characterize. The Philadelphia Semiconductor Index shed 2.7%, reflecting 4% losses in Advanced Micro ( AMD), Maxim Integrated ( MXIM) and Marvell Technologies ( MRVL). But bellwether chipmaker Intel ( INTC) was down just half a percent. "There's too much worry in the market," said Barry Hyman, equity market strategist with Ehrenkrantz King Nussbaum. "The worry of inflation and a slowing economy is still there. There's been an inability to rally off an oversold market. We haven't mustered anything of importance. We've had sector breakdowns. Semiconductors and retail are in disarray and continuing downward." Similarly, in software, Adobe ( ADBE) and Autodesk ( ADSK) were both off more than 3% Microsoft ( MSFT), which reported earnings after the bell Thursday, finished with a 1% decline. The company posted first-quarter earnings of $3.14 billion, or 29 cents a share, up from $2.53 billion, or 23 cents a share, a year ago. Results included a 2-cent charge related to a legal settlement with RealNetworks ( RNWK). Revenue rose to $9.74 billion from $9.19 billion a year ago but missed analysts' estimates of $9.78 billion. After the report, Microsoft was down 2% on Instinet. GM led the decline on the Dow, while McDonald's ( MCD), Home Depot ( HD), American Express ( AXP) and Johnson & Johnson ( JNJ) all had declines of 2% or greater. "The S&P 500 tried to stay above 1200
"The drop in orders ex-transportation is a bit disappointing, given the clear and strong rebound in the ISM index in recent months," said Ian Shepherdson, chief economist with High Frequency Economics. "The impact of Katrina may have depressed activity. In short, it is hard to draw any conclusions from the data. Perhaps the key point is that the ISM, which is less volatile than the hard data, signals real strength." The Commerce Department also said new-home sales rose 2.1% to an annualized rate of 1.22 million in September. August's number was revised lower to 1.19 million from 1.23 million. Economists expected sales to rise by 1% to an annualized rate of 1.25 million. Homebuilders finished uniformly lower after the new home sales data. Toll Brothers ( TOL) was down by 5.7%, Hovnanian ( HOV) fell 5%, Ryland ( RYL) was lower by 3.7% and Pulte Homes ( PHM) was off 1.3%. Also, the Labor Department said weekly U.S. jobless claims fell by 28,000 to 328,000 for the week ended Oct. 22. Economists expected a smaller decline to 340,000. Hurricane-related claims totaled 24,000 in the latest week. Another negative for stocks was Lucent ( LU), whose shares were cut to hold at Deutsche Bank with a lower price target. The brokerage cited earnings quality and uninspiring growth in the third quarter reported yesterday. Lucent was down 18 cents, or 6.1%, to close at $2.75. In earnings, Aetna's ( AET) net fell 77% from a year ago because of a large tax gain in the 2004 third quarter. Excluding a reserve reversal, Aetna earned $1.19 a share in the quarter, 2 cents better than expected. Aetna shares gained $2.10, or 2.6%, to $83.80. Shares of Exxon Mobil ( XOM) finished lower after the company reported earnings Thursday. Exxon posted third-quarter net income of $9.92 billion, or $1.58 a share, up from $5.68 billion, or 88 cents a share, a year ago. Results included a $1.62 billion gain from a business realignment. Revenue jumped to $100.7 billion from $76.4 billion a year ago. Excluding items, Exxon earned $8.3 billion, or $1.32 a share, missing the Thomson First Call average consensus of $1.38 a share. However, the stock was down 60 cents, or 1.1%, to $55.60. Royal Dutch Shell ( RDS.A) said third-quarter earnings shot up 67% from a year ago to $9.39 billion, including a gain of $1.77 billion from an asset sale. Sales rose 8% to $76.44 billion in the quarter. The stock was higher by $1.15, or 1.9%, to close at $60.65.
Meanwhile, Marathon Oil ( MRO) reported third-quarter net income of $770 million, or $2.09 a share, up from $222 million, or 64 cents a share, a year earlier. Excluding items, the oil company earned $797 million, or $2.16 a share. The Thomson First Call consensus was for earnings of $2.73 a share. Shares of Marathon were lower by $3.80, or 6.2%, to $57.28. Third-quarter profit rose 36% from a year ago at Alcatel ( ALA), helped by a 9% rise in revenue. The telecom-equipment supplier affirmed 2005 earnings guidance while trimming its forecast for operating margin. Alcatel lost 86 cents, or 6.8%, to $11.75. Dow Chemical ( DOW) said third-quarter earnings rose 30% from a year ago and easily beat estimates. Dow earned $801 million, or 82 cents a share, in the quarter, compared with the Wall Street forecast for earnings of 75 cents a share. Shares added 35 cents, or 0.8%, to $45.20. Verizon Communications ( VZ) posted third-quarter earnings of $1.87 billion, or 67 cents a share, up slightly from a year ago. Excluding items, Verizon earned $1.8 billion, or 66 cents a share. Revenue climbed to $19 billion from $18.2 billion last year. Analysts expected the company to post EPS of 64 cents on revenue of $18.8 billion. Looking ahead, Verizon tightened guidance for the fourth quarter. The company said revenue should rise in a range of 5.5% to 5.8% compared with its previous range of 5% to 6%. Verizon gained 17 cents, or 0.6%, to $30.76. Coca-Cola Enterprises ( CCE) reported third-quarter earnings of $192 million, or 40 cents a share, down from $207 million, or 44 cents a share, a year ago. Excluding items, earnings reached 47 cents a share, in line with the Thomson First Call average consensus. Revenue grew to $4.9 billion from $4.67 billion a year earlier. For the full year, Coca-Cola Enterprises expects earnings in a range of $1.27 to $1.30 a share after hurricanes Katrina and Rita. The Thomson First Call consensus remains at $1.30 a share for full-year earnings. Shares lost 59 cents, or 3%, to $18.86.
Shares of XM Satellite Radio ( XMSR) were trading lower after the company posted a third-quarter loss of $131.9 million, or 60 cents a share, compared with a loss of $118 million, or 59 cents a share, last year. Revenue more than doubled to $153 million from a year ago. Analysts surveyed by Thomson First Call had forecast a 68-cent loss on sales of $148 million. XM was down $3.14, or 10.1%, to close at $28.07. Phelps Dodge ( PD) posted third-quarter net income of $366.1 million, or $3.61 a share, up from $292.9 million, or $2.95 a share, a year ago. The company attributed the results to rising copper prices. Revenue climbed to $1.86 billion from $1.42 billion a year earlier. Analysts expected EPS of $4.01 on revenue of $2.21 billion, according to Thomson First Call. The stock fell $7, or 5.5%, to $119.40. Shares of Martha Stewart Living Omnimedia ( MSO) slid to a lower finish after the company reported a third-quarter loss of $26 million, or 51 cents a share, wider than a year ago, and offered disappointing fourth-quarter guidance. Revenue increased to $40.8 million from $38.6 million. The stock was down $3.23, or 15.2%, to $17.97. After the bell Wednesday, Chinese Internet search engine Baidu.com ( BIDU) posted a third-quarter profit of $1.1 million, or 3 cents a share, in its first earnings report since going public in August. Revenue jumped to $11 million from $3.9 million. The consensus estimates were for earnings of 6 cents a share on revenue of $9.5 million. Baidu fell hard, finishing down $10.70, or 13.2%, to $70.35. On Friday, earnings reports are expected from Chevron ( CVX), Bristol-Myers Squibb ( BMY), Overstock.com ( OSTK) and Corinthian Colleges ( COCO). Overseas markets were mostly lower, with London's FTSE 100 trading down 0.9% to 5183 and Germany's Xetra DAX losing 1.9% to 4806. In Asia, Japan's Nikkei rose 0.2% overnight to 13,417, while Hong Kong's Hang Seng lost 0.5% to 14,381.