Stocks End Mixed as Profit Reports Stymie the Dow
Blue chips slumped Wednesday on the latest batch of first-quarter earnings reports, but gains in some key technology stocks helped the Nasdaq market post a small advance.
The Dow Jones industrial average tumbled 144.75 points, or 1.7%, to 8,257.61, giving back most of the 199 points it had risen the previous two sessions.
The Standard & Poor’s 500 index lost 10.90 points, or 1.2%, to 879.91.
But the Nasdaq composite edged up 3.71 points, or 0.3%, to 1,394.72, as Intel and Microsoft rose after their profit reports were issued late Tuesday.
“There are still a lot of doubters about the economy and earnings,” James Luke, who helps manage $11 billion at BB&T; Asset Management in Raleigh, N.C., told Bloomberg News.
Those doubts were amplified by earnings reports from companies including Coca-Cola. It said quarterly operating profit matched analysts’ average estimate. But sales were weaker than expected in some major markets, triggering a heavy sell-off in the stock.
Coke shares slid $2.63, or 6.2%, to $39.90.
Other big-name stocks off sharply either on first-quarter data or on warnings about results included Maytag, down $3.07 to $18.79; Safeway, down $3.54 to $16.86; and casino giant MGM Mirage, off $3.19 to $26.72.
Another Dow stock, conglomerate 3M, dropped $4.64 to $129 after an analyst at J.P. Morgan trimmed earnings estimates for 2003 and 2004, citing the slow global economy.
“It’s still an earnings minefield because it was a very difficult first quarter,” said Peter Boockvar, equity strategist at Miller Tabak & Co. in New York. “You can’t blindly buy the market. There are pockets of weakness and nobody wants to step in that.”
Early in the week, upbeat profit reports from financial firms helped buoy the market. On Wednesday it was the tech sector that provided support.
Intel surged $1.03 to $18.16 after the chip giant late Tuesday posted better-than-expected results and sounded positive about the current quarter.
Microsoft added 31 cents to $24.91, and traded as high as $25.74. The software leader late Tuesday posted strong quarterly earnings.
A big winner was Texas Instruments, which rocketed $1.78 to $19. The chip company on Tuesday said first-quarter sales jumped 20%.
Despite the tech sector’s strength, falling stocks outnumbered rising issues by 8 to 7 on Nasdaq and by 6 to 5 on the New York Stock Exchange. Trading was active.
In other markets, oil prices slipped after rising for three straight sessions. Near-term crude futures in New York were off 11 cents to $29.18 a barrel.
Treasury bond yields pulled back, helped by the government’s report that consumer prices excluding food and energy were unchanged in March -- suggesting that deflation, rather than inflation, remains a significant risk in the weak economy.
The 10-year T-note yield fell to 3.94% from 3.99% Tuesday.
Among Wednesday’s market highlights:
* Coke’s sales problems may have weighed on other consumer-related shares. Procter & Gamble fell 78 cents to $89.10, Gillette lost 59 cents to $31.21, and Nike was off $1.42 to $52.35.
Coke arch-rival PepsiCo fell 67 cents to $39.90.
* Whirlpool slid $2.22 to $52.05 as rival Maytag said profit fell a larger-than-expected 39% last quarter because of slumping sales of Hoover vacuums.
* Casino-related stocks tumbled after MGM Mirage reported lower first-quarter earnings and said profit in the current quarter also will miss forecasts. The news pulled Mandalay Resort Group down $1.64 to $25.70 and hurt slot machine maker International Game Technology, which fell $2.82 to $78.71.
* Southland-based bank City National dropped $5.42 to $39.25 after falling short of Wall Street’s first-quarter earnings estimate.
* J.P. Morgan Chase eased 37 cents to $26.50. The No. 2 U.S. banking company said quarterly profit jumped 43%, helped by higher revenue in consumer banking. But the firm said it was “cautious” in its outlook for the rest of the year.
Merrill Lynch said its profit in the quarter was up 6%, thanks to cost cutting and a healthy bond business. Merrill shares lost 10 cents to $39.75.
* On the plus side, Ford Motor rose 88 cents to $9.23 after it swung back to profitability in the first quarter.
* Many real estate investment trust shares continued to attract buyers. Vornado Realty rose 60 cents to $37.85, Arden Realty added 38 cents to $23.98, and Essex Property jumped $1.07 to $55.17.
* Federated Department Stores lost 65 cents to $29.30 despite announcing a larger stock buyback program and that it will begin paying a quarterly dividend of 12.5 cents a share.
Market Roundup, C8-9
