Broad Market Closes Lower; Euro Weakens
Another slide in oil prices failed to help Wall Street much Monday, as stocks faded in the afternoon to close mostly lower.
Meanwhile, the euro weakened again after Friday’s surge, as traders tested central banks’ resolve to support the currency.
On Wall Street, the Nasdaq composite index closed down 62.54 points, or 1.6%, at 3,741.22, after being up as much as 65 points early in the day.
The Dow industrials eased 39.22 points, or 0.4%, to 10,808.15.
Bargain hunters managed to spark a rally in tech stocks early in the day, building on Friday’s rebound.
Nasdaq had plunged 5.6% early Friday in the wake of Intel’s warning that third-quarter sales would fall short of expectations. But a drop in oil prices and a jump in the euro currency helped cut Nasdaq’s loss by the close Friday to 25 points, or 0.7%.
But on Monday, the buying dried up as the day wore on. At the close, losers outnumbered winners by 22 to 18 on Nasdaq and by 16 to 13 on the New York Stock Exchange, in active trading.
A further decline in near-term oil futures, which fell $1.11 to $31.57 a barrel in New York--lowest in five weeks--couldn’t overcome continuing jitters about third-quarter corporate earnings, analysts said.
“This just highlights that this market has a bit more time to tread water with issues of third-quarter earnings and the lower, more tempered outlook for the economy going forward,” said Richard Cripps, chief market strategist for Legg Mason.
The weak euro, which has hurt the European operations of many U.S. multinationals in recent months, remains a worry.
The euro slipped to 87.3 U.S. cents on Monday from 87.9 cents on Friday, when it had surged as high as 90 cents after the European Central Bank, the U.S. Federal Reserve and the Bank of Japan surprised traders by buying euros in the open market to try to prop up the currency.
But with no sign of the central banks in the market Monday, corporate investors and Japanese exporters resumed their liquidation of the euro.
The Group of Seven major industrial nations meeting during the weekend said they would act to help the euro “as appropriate.” But Rolf Breuer, Deutsche Bank’s chief executive, said he doubts the U.S. will intervene again on the euro’s behalf, given the ongoing presidential campaign.
In foreign trading, Asian markets appeared to get a boost from oil’s slide. The Hong Kong market soared 5.6% and the South Korean market surged 5.7%.
Among Monday’s highlights:
* Intel continued to slide, after diving $13.55 to $47.94 on Friday in the wake of its sales warning. The stock fell $2.56 to close at $45.38 on Monday as 130 million shares changed hands.
Other major tech stocks also took a hit. Hewlett-Packard fell $5.31 to $98.88, Cisco Systems slid $3.13 to $57.19, Dell Computer lost $1.63 to $34.31 and Texas Instruments slid $5 to $52.
* Lexmark plunged to $43 in after-hours trading, after falling $2.63 to $52 in regular trading. The printer maker said profit in the second half of the year will be below forecasts because of lower inkjet cartridge sales and unfavorable exchange rates.
* The Internet sector was mixed. Yahoo lost $5.94 to $105.50 and Amazon.com fell $1.06 to $40.38, but Inktomi rose $2 to $127 and Tibco Software gained $5.13 to $83.63.
* Lucent Technologies dropped $1.56 to $30.88, lowest since 1998, on rumors the company may miss earnings estimates, and that its chairman may resign. The company had no comment.
* Energy stocks were lower as crude prices fell, but the stocks’ losses weren’t severe. Chevron fell $1.46 to $82.79, BP Amoco eased 38 cents to $52.50, Amerada Hess fell $1.38 to $64.25 and Apache lost 63 cents to $58.50.
* Many utility stocks rebounded after falling last week. Duke Energy gained $3.56 to $79.44 and PG&E; added 38 cents to $26.38.
* Some home builders’ shares rose after builder Del Webb got a takeover offer, sending its stock up $4.94 to $27.25. Among other builders, Kaufman & Broad jumped $1 to $26.56 and Ryland rose 44 cents to $28.25.
* Sotheby’s jumped $3.13 to $23.44 after the firm agreed to pay $256 million to settle a lawsuit that it colluded with Christie’s International to fix auction commissions.
* Financial stocks were mostly higher, led by Citigroup, up $1.38 to $54.13, and Merrill Lynch, up $3.06 to $66.50.
Market Roundup: C14, C15
