Dow Falls 97; Nasdaq Loses 93
NEW YORK, Feb 09, 2001 (AP Online via COMTEX) -- News that Motorola plans to cut up to 4,000 jobs sent the stock market down sharply Friday as investors grew even more pessimistic about the chances for a quick turnaround in the economy and company earnings.
Pharmaceutical and financial stocks advanced, but not enough to offset the broader downturn that began early in the session on reports that Dell Computer was also pondering layoffs. Analysts said investors were again shifting away from technology to sectors viewed as less risky.
In late afternoon trading on Wall Street, the Dow Jones industrial average was down 96.56 at 10,783.99.
The weakness in technology stocks also pushed the Nasdaq composite index down 93.44 to 2,468.62, while the Standard & Poor's 500 index dropped 17.80 to 1,314.73.
Motorola fell 67 cents to $19.15 after announcing a possible 3 percent cut in its semiconductor work force as part of efforts to save money in a softening market.
The announcement wasn't a huge surprise, given Motorola's previous 5,000-plus job cuts since December in its cell phone business. But it accelerated a technology selloff already under way on more general concerns that the sector will suffer in the months ahead as businesses and consumers spend less.
Dell dropped $2.81 to $23.25, an 11 percent loss, on a Wall Street Journal article that the computer maker was considering job cuts.
Nortel Networks slipped $2.21 to $30.49, and Oracle fell $3.50, or nearly 12 percent, to $23.63.
The market has been struggling for months with worries about profits and whether stocks are fairly valued in light of the slowing economy. Two interest rate cuts by the Federal Reserve last month helped spur some strong technology gains, but the rally has since faltered.
"It just seems like there hasn't been any good news for a while in technology, and these are the latest examples," said Charles Pradilla, chief investment strategist at SG Cowen Securities. "The earnings news and the announcements we've heard in this sector have been overwhelmingly negative.
"There really isn't a reason for these stocks to move higher right now."
Financial and pharmaceuticals sectors were stronger, reflecting investors' desire for less volatile stocks. Banker J.P. Morgan Chase rose 23 cents to $51.91, while pharmaceutical company Johnson & Johnson climbed 73 cents to $95.36. Utilities also benefited; Duke Energy climbed 26 cents to $41.29.
But retailers trailed behind for a second session after Thursday's selloff on worries that the sector will struggle in a sluggish economy. Wal-Mart dropped $1.82 to $50.48.
Also Friday, Lucent fell $1.51 to $15.38, a 9 percent drop, on news that the Securities and Exchange Commission is investigating accounting practices at the company.
Trading was relatively light on the New York Stock Exchange, where declining issues outnumbered advancers 16 to 13. Volume came to 827.11 million shares, down from 853.07 million at the same point Thursday.
The Russell 2000 index fell 6.99 to 495.90.
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By LISA SINGHANIA AP Business Writer
Copyright 2001 Associated Press, All rights reserved |
