Market Gives Up Gains, but at Slower Pace
The stock market ended mostly lower Thursday, continuing to give back ground won in Tuesday’s big rally.
Still, some analysts saw signs that investors are growing more resistant to the steady stream of bad news on Wall Street, especially with regard to corporate earnings.
The Nasdaq composite index lost 43.84 points, or 1.6%, to 2,752.66 on the heels of fresh earnings warnings or analyst downgrades involving such tech giants as Microsoft, Motorola and Yahoo.
But Nasdaq’s decline was about half what it lost Wednesday. The combined loss Wednesday and Thursday took back exactly 50% of Tuesday’s gain, when the index surged a record 274.05 points, or 10.5%, after Federal Reserve Chairman Alan Greenspan hinted that the central bank stands ready to cut interest rates in 2001.
The Dow Jones industrial average fell 47.02 points, or 0.4%, to 10,617.36 on Thursday.
Winners had a modest edge over losers on the New York Stock Exchange, while losers topped winners 23 to 15 on Nasdaq. Volume was moderate compared with recent sessions.
Treasury bond yields, which have been plunging over the last week on hopes of Fed rate cuts and as some investors fled the stock market, closed mostly little changed Thursday.
Despite another barrage of tech-company warnings--including Intel’s announcement after trading ended that it expects a weak fourth quarter--some analysts said selling in the stocks may be waning.
Indeed, Intel initially fell to $30 in after-hours trading, but then rose to $32.50--above its regular-trading close of $32.31.
“We’ve been living through an intense period of warnings from computer companies and, at this point, if you don’t know personal computer sales are slowing, you’re living under a rock,” said Kevin Caron, associate strategist at Gruntal & Co. “The surprise factor becomes less and less. The market already knows what’s happened and has adjusted to it.”
Also, Wells Fargo rose $1.06 to $49.56, and other bank shares rallied as well, even though Wells Chief Executive Richard Kovacevich said bad loans will rise industry-wide in coming quarters. He said Wells’ bad loans won’t rise at the pace seen at rival Bank of America.
BofA, whose shares slid $3.19 after it issued an earnings warning, rose $1 to $39. Among other banks, Washington Mutual gained $1.06 to $49.38 and Comerica rose $1.44 to $53.94.
Today the market will get more evidence as to the extent of the economy’s slowdown when the government reports November employment data.
A rise in the unemployment rate could cheer markets by putting further pressure on the Fed to begin easing credit sooner than later, experts say.
Market Roundup: C7, C8
