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Wall St. losses continue
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September 26, 2000: 5:31 p.m. ET
Another day, another blitz of financial disappointments hit stocks
By Staff Writer Jake Ulick
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NEW YORK (CNNfn) - An earnings warning from Eastman Kodak triggered another round of selling on Wall Street Tuesday with all three major U.S. stock indexes falling to their lowest level in two months.
With the week just two days old, more than a dozen firms have already readied investors for lower-than-expected results, hitting a skittish market that has suffered steep losses in September.
Eastman Kodak said third- and fourth-quarter earnings will miss targets, sending the Dow Jones industrial average lower. Lexmark, the printer maker, also pre-announced negative financials news. And Intel, a Dow member and one of the Nasdaq composite index's biggest movers, declined for a third straight session following last week's disappointing revenue forecast.
 "For two weeks we've been concerned about earnings, energy prices and the euro," Art Hogan, chief investment strategist at Jefferies & Co, told CNNfn's Market Coverage.
Those concerns continued Tuesday, sending the Dow down 176.83 points,
or 1.6 percent, to 10,631.32 -- it's the lowest close since Aug. 1, when the blue chip index finished at 10,606.95. Kodak accounted for almost half of the blue-chip index's losses.
The Nasdaq, meanwhile, fell for a fourth straight session, losing 52.11, or 1.40 percent, to 3,689.11. Tuesday's was the index's weakest finish since Aug 3, when the Nasdaq ended at 3,658.46.
The S&P 500 lost 11.19 to 1,427.78.
More stocks fell than rose in heavy trading. Declining issues on the New York Stock Exchange beat advancing ones 1,614 to 1,246 on volume of 1 billion shares. Nasdaq losers topped winners 2,595 to 1,114 as more than 1.8 billion shares traded.
After rising in August and tumbling over the last three weeks, the major stock indexes are back where they were in late July.
The day's declines sent investors running for the relative safety of fixed-income securities. Treasurys, which have outperformed stocks this year, rose for a second straight day. Utility stocks, also seen as a safe haven, gained.
 "Earnings disappointments are taking their toll," said Alan Ackerman, senior vice president at Fahnestock & Co.
Ackerman does not see any near-term catalysts bringing money into a stock market paralyzed by speculation over how much higher oil prices, steeper interest rates and a weakening euro will crimp profits. Companies won't begin posting results for the July-September period for another two weeks.
In other markets, the dollar fell against the yen and euro.
Kodak: Not a pretty picture
In one of the day's biggest losers, shares of Eastman Kodak (EK: Research, Estimates) plunged $14.88 to $44.13 after saying third-quarter earnings would come in 20 to 25 cents a share below its previous forecasts of $1.56 to $1.66 a share.
 And printer maker Lexmark (LXK: Research, Estimates) also readied analysts for lower third and fourth-quarter earnings due to the weak euro. Its shares tumbled $14.88 to $37.13. IBM (IBM: Research, Estimates), which also sells printers, lost $3.69 to $119.31.
Click here for a full look at the day's warnings.
While the series of warnings have spooked Wall Street, some analysts say the reporting of actual results for the third quarter period next month could lift stocks.
"By this time next week, we'll probably say we overdid it and be buying stocks," said Jefferies' Hogan.
Similarly, Abby Joseph Cohen, the influential Goldman Sachs strategist, last week said fears that the highest oil prices in a decade and the lowest euro were overdone will crimp profit are overdone.
Still, concerns about the health of corporate results persisted.
Intel (INTC: Research, Estimates) slipped $1.91 to $43.47, its third day of declines and it lowest close since January. The chip maker has lost about 25 percent of its value since saying late Thursday that third-quarter revenue would fall short.
More news from CNNfn.com for investors:
· Giving a portfolio more juice
· Put your money in storage
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But the session had a noteworthy gainer. Microsoft (MSFT: Research, Estimates) rose $1.44 to $62.69 after the Supreme Court declined the federal government's request to hear an appeal involving the antitrust finding against the No. 1 software maker.
The decision sends the matter to the U.S. Court of Appeals in Washington, D.C, perceived as friendlier in the antitrust matters in which Microsoft is entangled. The move also buys Microsoft time, postponing a matter that could lose relevance as technology changes and a new president takes office.
An initial public offering, meanwhile, surged amid a tired market. Shares of Cosine (COSN: Research, Estimates), a maker of networking equipment, jumped nearly 200 percent in their debut, gaining $40.06 to $63.06.
What price stocks?
With the economy slowing, investors have been anxious about how what this means for earnings growth. A slackening in profits tends to prompt companies to spend less, which in turn slows production, overtime pay and hiring. Less hiring and overtime pay means less money in worker's paychecks, crimping consumer spending. In a country where consumption accounts for two-thirds of the economy, a cool down in spending will likely mean some downward adjustments in the major stock indexes, which have gained every year since 1994.
 Companies most sensitive to consumer spending fell Tuesday. Retailers Wal-Mart (WMT: Research, Estimates) dropped $2 to $47 and Home Depot (HD: Research, Estimates) declined $1.25 to $53.38.
Still, consumer confidence in September rose to 141.9, above the 141.2 figure expected by analysts surveyed by Briefing.com.
The surprise surge in consumer sentiment comes despite September's big stock losses. All the major stock indexes are down for the year. The Dow is off 7.5 percent in 2000 while the Nasdaq is 9.3 percent lower in the period.
But positives exist. Unemployment remains low and many economists expect that the Federal Reserve, ever wary about rising inflation, will leave interest rates alone for the rest of the year.
As he looks ahead to the last three months of a tough year on Wall Street, Bryan Piskorowski, market analyst at Prudential Securities, sees a stronger market ahead. (WAV 432K) (AIFF 432K) 
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