Indexes Finish Mixed Amid Profit Jitters
Friday’s big market rally failed to carry over to Monday as cautious investors sold big technology issues such as Intel and Microsoft on fears their upcoming earnings reports will disappoint Wall Street.
The Nasdaq composite index, which on Friday defied a week of losses and soared to its second-biggest percentage gain ever, see-sawed to a 26.49-point, 0.8% loss Monday, closing at 3,290.28.
The Dow Jones industrial average closed up 46.62 points, or 0.5%, at 10,238.80, despite the dips in Intel and Microsoft.
But losers held a modest edge over winners on Nasdaq and on the New York Stock Exchange. Trading volume was at its lightest in three sessions.
With third-quarter earnings reporting season in full swing this week, “If there’s any doubt about earnings,” investors are selling the stock, said Richard Sichel, chief investment officer of Philadelphia Trust.
But he added: “If we get some good earnings, that can change the tone of the market pretty quickly.”
Intel, due to report today, was hit Monday as Salomon Smith Barney analyst Jonathan Joseph cut his third-quarter per-share estimate to 37 cents from 38 cents. He maintained his “market outperform” rating for the stock, but cut his one-year price target to $50 from $75.
“The much-hoped-for mid-October pickup in personal-computer demand has failed to materialize,” Joseph said.
Intel shares plunged $4.69 to $35.69. Among other PC-related stocks, Microsoft slid $3.38 to $50.38, Dell Computer fell $1.95 to $25.36 and Gateway lost $2.34 to $50.77.
But other tech issues rallied. The Dow’s boost Monday came from stocks such as IBM, which climbed $2.06 to $111.13, and Hewlett-Packard, which rose $2.06 to $92.69.
Nervousness over earnings extended to many non-tech shares.
Bank of America fell $1.38 to $45.19 and Polaroid closed down $2.31 at $9.25, after each company reported earnings that didn’t live up to the market’s expectations.
Continental Airlines’ third-quarter earnings were ahead of Wall Street estimates, but the market response was stingy--the stock closed up 75 cents at $42.94.
But Downey Financial, parent of Downey Savings, surged $3.63 to $39.75 on its earnings report.
In other markets, the euro traded near its record low against the dollar, closing at 85.1 cents in New York. That fanned speculation that central banks may buy euros as they did three weeks ago to prop up the faltering multinational currency.
Among Monday’s highlights:
* Oil prices plunged almost 6%, dragging energy company shares down with them. Crude oil for November delivery closed at $32.92 a barrel on the New York Mercantile Exchange, down $2.07. Prices rose sharply last week on rising tensions in the Middle East.
Among oil companies, Exxon Mobil was off $2.69 to $87.81, Triton Energy fell $1.31 to $34.94 and Anadarko Petroleum slid $1.20 to $69.55.
* Utility shares continued to be a bright spot. Peco Energy jumped $2.50 to $60.44. Duke Energy rose $1.50 to $86.63.
* Xerox continued its slide on concern the world’s largest copier company won’t be able to borrow to finance its business. Xerox shares tumbled 25%, down $2.69 to $7.75.
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Market Roundup, C14-15
