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Markets & Stocks
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End of the line?
Intel's weak quarterly results threatens U.S. stock market's four-day rally.
October 16, 2002: 9:02 AM EDT
By Mark M. Meinero & Meghan Collins, CNN/Money Staff Writers

NEW YORK (CNN/Money) - Disappointing earnings from Intel and Coca-Cola weighed on positive reports from some other Dow components Wednesday ahead of the opening bell and threatened a four-day stock market rally.

Early indications point to a sharply lower open for the major indexes, which are coming off one of the year's biggest gains Tuesday.

"Most of the market is going to be driven by Intel," Norman Fuchs, senior technology research analyst at M.H. Meyerson, told CNNfn's CNNmoney Morning.

Late Tuesday, Intel (INTC: Research, Estimates) reported higher third-quarter earnings that were below analysts' estimates and warned that the profit margin for the current quarter would fall short of forecasts. The double whammy sent investors scurrying; Intel was down $2.81 to $13.70 in before-hours trading.

Soft drink leader Coca-Cola (KO: Research, Estimates) posted income of 47 cents a share, just missing analyst estimates of 48 cents a share, but higher than the 41 cents earned in the 2001 quarter. Shares of Coca-Cola fell 5 percent in Europe.

No. 2 U.S. automaker Ford (F: Research, Estimates) posted better-than-expected earnings of 12 cents a share for the third quarter, excluding special items, beating First Call analyst estimates of 3 cents a share but missing last year's earnings of 28 cents a share on the same basis. Ford shares gained 4 cents to $8.85 in pre-market trading.

J.P. Morgan Chase (JPM: Research, Estimates), whose association with bankrupt Enron has been questioned by investigators, posted third-quarter operating earnings of 16 cents a share. That topped analysts' estimates of 7 cents a share, but fell from the same period last year, according to First Call. The investment bank also said it plans to cut its staff by 2,000. Shares of J.P. Morgan slid 4 percent in Europe.

Boeing (BA: Research, Estimates), the aircraft manufacturer, reported earnings of 46 cents a share, down from 88 cents in the prior year bur in-line with analyst expectations.

Industrial equipment maker Caterpillar's (CAT: Research, Estimates) earnings came in at 61 cents a share, beating analyst expectations of 55 cents a share and up from 59 cents.

Aerospace component maker Honeywell International (HON: Research, Estimates) posted an earnings rise to 50 cents a share from 44 cents.

After the closing bell, computer products leader IBM (IBM: Research, Estimates) posts its third-quarter earnings. They're expected to have slipped to 96 cents a share from 97 cents in the prior year. Shares of IBM fell 48 cents to $68 in pre-market trading.

Wireless technology developer Motorola (MOT: Research, Estimates) posted its first profit in seven quarters late Tuesday, but said sales were below expectations. Its shares fell $1.10 to $9 in before-hours trading.

The Dow Jones industrial average is defending a more than 13 percent advance over the past four sessions, including Tuesday's 378-point surge. The Nasdaq composite index is coming off a 61-point boost.

Asian-Pacific stocks finished higher Wednesday, with Tokyo's Nikkei index up 0.5 percent. European markets fell in midday trading.

Treasury prices recovered a little of their recent losses in early trading, sending the 10-year note yield down to 4.02 percent from 4.04 percent late Tuesday. The dollar slipped against the yen and was unchanged against the euro.

Brent oil futures rose 15 cents to $28.29 a barrel in London, where gold was lower.

In a morning note, investment bank Credit Suisse First Boston lowered its 2002 and 2003 revenue and earnings estimates for chipmaker Cadence Design Systems (CDS: Research, Estimates) a day after the company dropped its order guidance for 2002. Shares of Cadence gained 27 cents to $11.69 Tuesday.

Credit Suisse also said it would review its estimates for chipmaker Teradyne (TER: Research, Estimates) and telecom company Motorola (MOT: Research, Estimates), and also increased its sales forecast for consumer products maker Johnson & Johnson (JNJ: Research, Estimates), after the companies reported financial results Tuesday.

Wachovia downgraded Capital One (COF: Research, Estimates) to "sell," while Merrill Lynch raised its 2002 earnings forecast for the bank to $3.93 a share from $3.79, citing its better-than-expected financial results for the quarter and its guidance. Shares of Capitol One fell $4.58 to $30.05 in before-hours trading.

Merrill also dropped its 2003 and 2004 revenue estimates for Applied Micro Circuits (AMCC: Research, Estimates) and increased its loss estimates for the chipmaker a day after it reported flat quarter-over-quarter financial results. Applied Micro fell 37 cents to $3.30 before hours.  Top of page




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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.