Wall St. Slides, Tokyo Market Surges
U.S. stocks overall closed narrowly lower Thursday amid lingering worries over Asia and a new barrage of corporate earnings reports.
Meanwhile, stocks rocketed today in Tokyo after Japan’s ruling party pledged to carry out all possible measures to boost the struggling economy.
The Nikkei-225 stock index was up 771.43 points, or 5.1%, to 15,893.41 at midday today. But other Asian markets were mixed today, after steep gains in recent sessions as the region’s economic crisis appeared to stabilize.
On Wall Street, the Dow Jones industrial average fell 92.92 points, or 1.2%, to 7,691.77 on Thursday as profit takers moved in after three consecutive rising sessions.
But the broad market wasn’t nearly as weak. Losers had just a 16-14 edge over winners on the New York Stock Exchange. And the Nasdaq composite index of mostly smaller stocks was off just 1.70 points at 1,547.06.
Asian markets’ powerful rallies earlier in the week began to run out of steam Thursday. While South Korea’s main index surged 6.5% in record trading, Hong Kong’s market tumbled 7% and Singapore’s lost 0.8%.
Early today, those markets again were uneven, as Korean shares pulled back while Hong Kong rebounded 3%.
The focus on Wall Street on Thursday turned more toward earnings reports, traders said. A disappointing report from Eastman Kodak and warnings from Data General and ADC Telecommunications weighed on sentiment.
Kodak shares fell $1 to $58.50 after the firm reported a huge quarterly loss. Data General sank $2.81 to $14.06 after the computer maker said profit for the first quarter ended Dec. 27 will be “below the low end” of analyst estimates.
ADC plummeted $5.56 to $30.44. ADC’s shares were under pressure all day on rumors, but the company declined to comment. After the market closed, the telecom equipment maker said earnings in the quarter that will end Jan. 31 won’t meet estimates because of slower-than-expected demand--which analysts pinned on reduced buying by regional Bell companies.
Elsewhere in U.S. markets, bonds drifted through another placid session, with yields edging up slightly on longer-term issues.
The dollar, however, fell to 129.81 yen, its third straight decline, anticipating the Japanese ruling party’s statement today about boosting the economy.
Although the ruling Liberal Democratic Party’s statement was vague, the newspaper Nihon Keizai said the party is considering a plan to let banks revalue their property assets at current value rather than purchase price and include any unrealized gain in their capital, without requiring them to pay taxes on it.
That would give Japanese banks a much-needed capital boost at a time when they are facing huge losses from a plunging stock market and bad-loan write-offs. The banks could then turn around and lend more to companies without worrying about breaching their capital-to-asset ratios, the plan’s proponents say.
Among U.S. market highlights Thursday:
* Telecom stocks were under pressure as rumors circulated about ADC’s earnings. Lucent dove $3.44 to $75.06, Tellabs dropped $1.81 to $49.44 and Northern Telecom fell $1.94 to $42.56.
* Tobacco stocks slid further after the release of documents this week showing that R.J. Reynolds tried to lure young smokers. RJR Nabisco lost $1.19 to $36.50 and Philip Morris sank $2 to $45.
* Among stocks responding to earnings reports, Digital Equipment jumped $1.88 to $39.38, Freddie Mac rose 63 cents to $44.75 and PPG Industries added 75 cents to $55.19. Honeywell lost 94 cents to $67.63 and Unisys fell 69 cents to $15.38.
So far this quarter, 66 companies in the S&P; 500 have reported fourth-quarter earnings. Of them, 58% topped expectations--but those expectations have been lowered considerably in recent weeks.
Market Roundup, D6
