MARKET SNAPSHOT
More selling in tech sector
Dow also retreats; airlines take a hit
By Julie Rannazzisi, CBS.MarketWatch.com
Last Update: 11:33 AM ET Jul 19, 2000 NewsWatch
Latest headlines
NEW YORK (CBS.MW) - The major averages fell into the minus column Wednesday as investors again unloaded stocks, failing respond to positive earnings news.
Inside the broader market, airline stocks took a hit following an earnings warning from UAL for third-quarter results. Also lower were drug, biotech and brokerage shares. In the tech arena, chip and Internet issues led on the downside.
Market players continued to take profits in the tech sector with a negative reaction to positive earnings news from behemoths Microsoft and Intel.
"This is just a corrective process. I think the pullback is offering investors some good buying opportunities," said Bryan Piskorowski, market analyst at Prudential Securities.
"Once we saw positive earnings news come in last week, the market began to discount the good news and stocks became overextended," Piskorowski said. This, he added, triggered the market's buy-the-rumor and sell-the-fact reaction to earnings news over the past couple of trading days.
The Dow Jones Industrial Average lost 19 points, or 0.2 percent, to 10,720 at 11:29 a.m.
The Nasdaq Composite declined 76 points, or 1.8 percent, to 4,100 while the Nasdaq 100 Index trimmed 72 points, or 1.8 percent, to 3,889.
Microsoft (MSFT: news, msgs) shed 3 1/2 to 75. The software kingpin reported a second-quarter profit of 44 cents a share after the close Tuesday, beating the First Call estimate of 42 cents a share. Microsoft made 40 cents a share in the year-ago quarter. See full story.
And Intel shed 1/8 to 142 7/8, erasing earlier gains. The chip behemoth (INTC: news, msgs) registered late Tuesday a second-quarter profit of $1.00 a share, beating the First Call estimate of 98 cents a share. On a post-split basis, net income totaled 50 cents a share compared to 26 cents in the year-ago period. See full story.
Merrill Lynch upwardly revised its 2000 earnings estimate for Intel to $3.37 from $3.30 and the 2001 number climbed to $3.55 from $3.35. The brokerage also raised its price target on the stock to $165 from $150.
Intel is beginning to catch up to demand and positioned to enjoy a good second half of 2000, Merrill said. Accumulating the stock in front of the second half makes sense, the brokerage concluded.
The Standard & Poor's 500 Index lost 0.5 percent while the Russell 2000 Index of small-capitalization stocks erased 1.1 percent.
Separately, volume came in at 355 million on the NYSE and at 568 million on the Nasdaq Stock Market. Losers outpaced winners by 14 to 11 on the NYSE and by 22 to 13 on the Nasdaq.
More Dow components report
Citigroup (C: news, msgs) registered a second-quarter profit of 87 cents per share, beating the First Call estimate of 83 cents a share. The financial giant made 71 cents in the year-ago period. The company also declared a 4-for-3 stock split and approved the buyback of an additional $5 billion of Citigroup common stock. Shares rose 1/4 to 66 15/16. Read full story.
United Technologies (UTX: news, msgs) checked in with a second-quarter profit from operations of $1.00 share, two cents ahead of the First Call estimate. The company made 85 cents in the year-ago period. Shares rose 15/16 to 59 15/16.
Coca-Cola (KO: news, msgs) checked in with earnings of 44 cents a share in the second quarter, beating the First Call estimate of 41 cents per share. The beverage giant made 38 cents in the year-ago quarter. The stock edged up 15/16 to 59 1/8.
IBM (IBM: news, msgs) is set to report quarterly results after the close Wednesday. The First Call estimate for Big Blue is earnings of $1.00 per share. The stock slipped 5/16 to 103.
More earnings
EMC Corp. reported Wednesday second-quarter earnings of 19 cents a share, 2 cents ahead of the First Call estimate. The company earned 13 cents in the year-ago period. The stock (EMC: news, msgs) added 3 1/16 to 81 5/8.
A number of financial companies unleashed their quarterly results Wednesday. Bank One (ONE: news, msgs) reported a second-quarter profit from operations of 55 cents a share, missing the First Call estimate of 64 cents per share. The stock rose 1 1/4 to 31 1/4.
Chase Manhattan Bank (CMB: news, msgs) checked in with a second-quarter profit from operations of 95 cents a share, beating the First Call estimate of 83 cents a share. The stock added 1/4 to 51 3/16.
Treasury focus
In the Treasury market, prices slipped in what may be another session of cautious trading ahead of Fed Chief Alan Greenspan's testimony on monetary policy on Capitol Hill.
Prices barely budged from the unchanged mark on Tuesday as Treasurys reacted to the stronger-than-expected CPI as well as the falling stock prices.
In other news, the Treasury announced it will buy back up to $1.5 billion in 30-year bonds on Thursday.
The 10-year Treasury note was off 7/32 to yield 6.175 percent while the 30-year bond trimmed 7/32 to yield 5.925 percent. See Bond Report.
In economic news, Wednesday saw the release of the May trade figures, which revealed a deficit of $31.04 billion, larger than the expected $30.3 billion. The April deficit was upwardly revised to $30.50 billion from the previously reported $30.44 billion. See full story and view Economic Preview, economic calendar and forecasts and historical economic data.
In the currency arena, the greenback fell a touch against the yen following the release of the trade numbers but recovered shortly after. Dollar/yen lost 0.2 percent to 107.95 while euro/dollar shed 0.1 percent to 0.9239. See latest currency rates.
In the commodity arena, August crude added 5 cents to $31.99 while the Bridge CRB index piled on 1.39 to 223.95.
--------------------------------------------------------------------------------
Julie Rannazzisi is markets editor for CBS.MarketWatch.com. |
