graphic
graphic  
graphic
Markets & Stocks
graphic
Wall St. retreats
graphic October 29, 2001: 5:17 p.m. ET

U.S. indexes fall back on gross domestic product worries and Boeing's news.
By Staff Writer Alexandra Twin
graphic
graphic graphic
graphic
graphic
graphic       graphic
  • Europe's markets - Oct. 29, 2001
  •  
    graphic
    graphic
    graphic       graphic
  • Asia's markets - Oct. 29, 2001
  • Latest upgrades
  • Latest downgrades
  • Initiated coverage
  • Stock split calendar
  • IPO's
  •  
    graphic
    NEW YORK (CNNmoney) - U.S. equity indexes fell Monday as nervousness about expected weak gross domestic product data and corporate news - led by Boeing's failure to win a $200 billion Defense Department contract - enhanced the selling that can often follow a sustained rally.

    Stock investors have enjoyed strong gains over the last month, as indexes have rallied off of post-Sept. 11 lows.

    The Dow Jones industrial average lost 275.67, or 2.89 percent, to close at 9,269.50. It was the largest point drop since September 20, the fourth day that markets were open following the September 11 attacks, when the average fell 382.92 points, or 4.3 percent.

    The Nasdaq composite index dropped 69.44, or 3.93 percent, to end at 1,699.52, marking the largest point drop since October 17, when the composite fell 75.73 points. The S&P 500 gave back 26.31, or more than 2 percent, to close at 1,078.30, also the largest pullback since October 17, when it gave back 20.45 points.

    Treasury securities rose, with the 10-year note yield sliding to 4.48 percent from 4.53 percent late Friday. The dollar was down versus the euro and the yen.

      graphic
    "We've had a market where negative news on the economy and the corporate profit picture have dominated," Tony Dwyer, chief market strategist at Kirlin Securities, told CNNfn. "Companies may have beaten lowered estimates, but we're expecting weak economic reports this week."

    On Wednesday, the U.S. Department of Commerce will release the third-quarter growth rate for gross domestic product (GDP) - the broadest measure of the nation's economy.

    Economists expect GDP to decline by 1 percent, compared with a revised growth of 0.3 percent in the second quarter. The number is preliminary and will be revised.

    The data could present a challenge to both psychological and statistical hopes for a near-term recovery. While some experts argue that the economy already is in a recession, many economists say the technical definition of a recession is two consecutive quarters of negative growth.

    graphic  
    Further weakness may become apparent when the Conference Board releases its October index of consumer confidence Tuesday. Economists expect the number to fall to 95.9 from a revised 97.6 in September.

    "This is some orderly profit-taking in a market that is susceptible to bad news, but I wouldn't put it in a negative context. You have a market that's pushed 1,600 points off its lows recently, so a couple hundred points back down is not so bad," said Jack Baker, head of equities at Putnam Lovall Securities.

    "Fundamentally and technically, you have a market that's back where it was before Sept. 11," Lovall said.

    graphic  
    Monday's market breadth was negative. On the Nasdaq, losers beat out winners by a nearly 7-to-4 margin as 1.66 billion shares traded hands. On the New York Stock Exchange, decliners topped advancers by 2 to 1 as 1.09 billion shares changed hands.

    In overseas stock trading, European markets closed lower on weakness in telecommunications and banking issues, while Asia's stock markets also fell. Latin America added some pressure as long-held concerns that Argentina might default on its $132 billion debt were intensified.

    Boeing pressures Dow

    General Motors and Boeing both pressured the Dow on insecurity stemming from their multibillion-dollar deals. On the Nasdaq, the computer hardware and telecommunications sectors were among the leading losers on the broad-based tech selloff.

    Aircraft maker Boeing (BA: down $3.93 to $33.75, Research, Estimates) lost out to competitor Lockheed Martin (LMT: down $0.92 to $49.00, Research, Estimates) for a $200 billion Joint Strike Fighter contract from the government.

    graphic  
    Echostar Communications (DISH: down $1.18 to $24.08, Research, Estimates) agreed to buy GM's Hughes Communications (GMH: down $0.99 to $14.36, Research, Estimates), the company's satellite division, for about $26 billion in cash and stock.

    This was bad news for News Corp. (NWS: down $1.80 to $27.25, Research, Estimates), which had offered to buy the company for $22.5 billion. GM (GM: down $2.64 to $42.76, Research, Estimates) shares also fell on the deal.

    The Dow's other big pressure points were United Technologies (UTX: down $2.57 to $54.44, Research, Estimates) and 3M (MMM: down $3.30 to $106.53, Research, Estimates).

    UAL (UAL: up $0.22 to $14.15, Research, Estimates) Chairman and CEO James Goodwin was replaced Sunday with board member Jack Creighton, four days after the International Association of Machinists, whose members own about 20 percent of the company, called for Goodwin's removal.

    AT&T (T: down $0.24 to $15.77, Research, Estimates) is considering a $5 billion-to-$7 billion bond offering, according to the Wall Street Journal.

    Chip makers Intel (INTC: down $1.68 to $24.18, Research, Estimates) and Xilinx (XLNX: down $3.32 to $30.01, Research, Estimates) dragged down the Philadelphia Semiconductor index by 4.5 percent. The index had risen 13 percent the previous week.

    There were a few positive notes:

    -- Express delivery service FedEx (FDX: up $1.38 to $40.86, Research, Estimates) said it will top forecasts when it reports its second-quarter earnings.

    -- Real estate company Cabot Industrial Trust rose on news that it had agreed to a buyout offer from privately held Calwest Industrial Properties (CTR: up $3.86 to $23.81, Research, Estimates) for $2.1 billion in stock and assumed debt.

    -- Building on national security fears, technology company Titan (TTN: down $0.65 to $26.35, Research, Estimates) said Friday that the U.S. Postal Service will buy up to 20 of its electron beam systems for about $40 million to sterilize mail and eliminate the threat of anthrax. Surebeam (SURE: up $1.67 to $14.92, Research, Estimates) will subcontract.

    Fewer corporate reports

    As the September-quarter reporting period is winding down, earnings are expected to have fallen more than 20 percent, the third straight quarterly decline, according to the research firm First Call. However, some analysts say that investors appear to be looking ahead to the first half of 2002, when conditions are expected to improve.

    graphic  
    In the very near term, Lovall Securities' Baker points to historic data that support the tendency for markets to make gains in the last week of October through November.

    On the bioterrorism front, anthrax tests at the U.S. Supreme Court building forced justices out of their Washington courtroom for the first time since the building was erected in 1935. The justices continued working from the U.S. Court of Appeals.

    In Afghanistan, U.S. jets resumed bombing specific targets Monday on the southern Taliban stronghold of Kandahar after a relatively quiet Sunday night. graphic

      RELATED STORIES

    Europe's markets - Oct. 29, 2001

      RELATED LINKS

    Asia's markets - Oct. 29, 2001

    Latest upgrades

    Latest downgrades

    Initiated coverage

    Stock split calendar

    IPO's

    Earnings warnings

    Economic calendar

    View the latest market update via Netshow

    See how your mutual funds are doing

    Need investing advice?

    Track your stocks

    U.S. stock markets

    Widely held stocks





    graphic graphic

    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.

    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.

    graphic