|
Stocks slide on Wall St.
|
 |
February 8, 2001: 4:26 p.m. ET
Lack of news renews economic concerns, prompts investors to cash in
by Staff Writer Catherine Tymkiw
|
NEW YORK (CNNfn) - U.S. stocks tumbled Thursday afternoon as investors cashed in profits and, on a day with little else to chew on, sat on the sidelines amid renewed concerns about how much corporate profits will be affected by a slowing economy.
Slower retail sales weighed on the Dow Jones industrial average. General malaise about the growth prospects for technology companies pressured the tech-heavy Nasdaq composite index to its lowest level in a month as investors took guidance from individual corporate stories.
 But investors weren't running for the exits. Instead, many were taking a break from participating in the markets as they attempted to gauge how aggressive the Federal Reserve would be with its interest-rate policy in a slowing economy.
"No one is panicking and that is the good news," said Charles Payne, head analyst at Wall Street Strategies. "There's no leadership out there and there are a lot of question marks. Investors have convinced themselves of a better second half, but it's not assured."
 The Nasdaq composite index slipped 45.76, or more than 1 percent, to 2,562.06, giving back its early gains. The Dow Jones industrial average dropped 66.17 to 10,880.55. The S&P 500 slipped 8.36 to 1,332.53.
The choppy, sluggish session was compounded by a lack of conviction that analysts say will continue to prompt a lack of commitment on the part of investors, at least in the near-term, until the economy starts to show significant signs of recovery.
"People are going to be schizophrenic this year, between an easing Fed, hope that the economy will recover in the second half, and despondency that business trends are weak," said David Katz, chief investment officer with Matrix Asset Advisors.
Market breadth was negative. On the New York Stock Exchange, declines beat advances 1,649 to 1,435 as more than 1.08 billion shares changed hands. Losers outpaced winners on the Nasdaq 2,071 to 1,675 as more than 1.82 billion shares were traded.
In other markets, Treasury securities were mostly lower. The dollar rose against the euro and was little changed against the yen.
Stocks dragged down by economy
A Labor Department report that showed new claims for unemployment benefits rising sharply last week, indicating a continuing slowdown in the labor market, was one news item chastening investors.
While this report often is viewed as a less significant factor for the Fed, it further cements the view that the economy is not yet turning around and lends uncertainty about when some life may be breathed back into it.
"Nobody knows how serious the economic decline actually is or how long it's going to last or whether [Federal Reserve Chairman Alan] Greenspan's efforts [to cut interest rates and stimulate the economy] will be successful or if the Bush administration's tax cut will really fire the economy," said Jon Burnham, chairman of Burnham Securities.
Wall Street's Payne agreed with Burnham but also said the markets will likely start to look brighter as the year progresses.
"I really believe it's going to be a really good year, between the rate cuts, the tax cuts, lower expectations and realistic expectations," he said. "All of that level-headed thinking will help this market build a head of steam going into the summer months."
Richard McCabe, chief market analyst for Merrill Lynch, agreed, telling CNNfn's In the Money he thought the Nasdaq could return to 3,000 by April -- though he added it could revisit lows of about 2,300 before the recovery begins.(356K WAV) (356K AIFF)
Mixed celebration for Nasdaq
Not all the news was bad on the Nasdaq's 30th birthday.
"Basically it's a buyers' strike and it's a market of individual stocks rather than the market as a whole," said Peter Cardillo, director of research with Westfalia Investments.
WorldCom (WCOM: Research, Estimates), the No. 2 U.S. long-distance phone company, gained 25 cents to $20.38 after it said fourth-quarter earnings tumbled 45 percent to 25 cents a share, including goodwill. The results matched already lowered Wall Street forecasts.
 Electronic Data Systems (EDS: Research, Estimates) rose $6.05 to $62.95 after the technology services firm reported higher-than-expected fourth-quarter earnings as contract signings reached a new high.
But most tech stocks did not fare as well.
Microsoft (MSFT: Research, Estimates), a mover for both the Nasdaq and the Dow, fell $2.44 to $62.25 after Merrill Lynch cut its rating to "accumulate" from "buy."
 Also weighing on the Nasdaq were Yahoo! (YHOO: Research, Estimates), down $3.25 to $30.19; JDS Uniphase (JDSU: Research, Estimates), down $3.31 to $44.94; and Cisco Systems (CSCO: Research, Estimates) in another day of selling, down $1.06 to $30.
Retailers, reporting January sales figures, suffered. Wal-Mart Stores (WMT: Research, Estimates), a Dow component and the biggest U.S. retailer, slid $2.36 to $52.30 after it reported stronger January sales than a year earlier.
Other Dow movers included Home Depot (HD: Research, Estimates), down $1.79 to $43.99, and IBM (IBM: Research, Estimates) down $2.81 to $114.10.
And in the first major initial public offering of 2001, KPMG Consulting (KCIN: Research, Estimates) rose $5.47 to $23.47 after pricing its shares at $18, the high end of its expected range. 
|
|
|
|
|
 |
|
