<font color-blue>MARKET SNAPSHOT--Kodak tumble slaps Dow
But Microsoft, chip gains limit Nasdaq losses
By Julie Rannazzisi, CBS.MarketWatch.com
Last Update: 12:18 PM ET Sep 26, 2000
NEW YORK (CBS.MW) - A profit warning from Eastman Kodak put another chink in the market's armor, producing a triple-digit loss for the Dow Industrials Tuesday.
The Nasdaq witnessed choppy action throughout the session, remaining close to the unchanged mark amid the weakness in the broad market.
But a 4.1 percent spike in shares of Microsoft contained losses. The upward jolt was sparked by a U.S. Supreme Court decision to send Microsoft's antitrust case back to a lower appeals court, which will delay efforts to break up the software giant. The stock rose as high as $65.88.
Inside the tech arena, chip issues managed to chisel out a gain while the broad market saw positive action in oil, oil service and utility stocks - the market's favorite groups this year -- while financial, retail, biotech and drug issues struggled.
The Dow Jones Industrials Average ($DJ) dropped 119 points, or 1.1 percent, to 10,688.
Kodak (EK) said third-quarter earnings will come in 20 to 25 cents short of the previously-expected range of $1.56 to $1.66 a share. The First Call estimate for third-quarter earnings pare share stood at $1.60. Slumping sales were unable to offset pressures from a rising dollar and increased raw material costs, among others. Shares dropped 21 percent, or $12.25 to $46.75.
Aside from Kodak, the Dow's downside leaders included Intel Merck, IBM, Home Depot and Caterpillar. Moving higher were shares of Microsoft, Hewlett-Packard and Exxon Mobil.
The Nasdaq Composite ($COMPQ) slumped 1 point to 3,739 while the Nasdaq 100 Index ($NDX) edged up 16 points, or 0.4 percent, to 3,638.
The Standard & Poor's 500 Index ($SPX) edged down 0.3 percent while the Russell 2000 Index ($RUT) of small-capitalization stocks fell 0.5 percent.
Separately, volume was heavy at 501 million on the NYSE and at 829 million on the Nasdaq Stock Market. Breadth was negative, with losers outnumbering winners by 13 to 12 on the NYSE and by 23 to 13 on the Nasdaq.
Sector movers
Chip stocks recovered even as Intel continued to sing the blues. The Philadelphia Semiconductor Index ($SOX) rose for the first time in three trading sessions, gaining 1.9 percent. Micron Technology (MU) climbed 7 percent to $50 and National Semiconductor (NSM) gained 4 percent to $41.69. But Intel (INTC) slumped $1.38 to $45.13.
The computer hardware sector was hurt by a profit warning from Lexmark International (LXK). The company said that third-quarter earnings will come in at 45 to 50 cents a share, less than the 60 cents anticipated by First Call. And fourth-quarter earnings are likely to check in at 55 to 65 cents per share versus the Wall Street estimate of 80 cents a share. Lexmark blamed the shortfall on the reduced forecast of inkjet cartridge sales and weakness in European currencies. Shares plunged $13.88, or 26 percent, to $38.13. Dow-component Hewlett-Packard (HWP), slipped 50 cents below Monday's official NYSE close to $100.81. The Goldman Sachs Computer Hardware Index ($GHA) subtracted 0.8 percent.
The retail sector came under additional pressure on Tuesday following a profit warning from Guess (GES) after the close on Monday. The company said it expects third-quarter earnings-per-share of 35 to 38 cents, well below the First Call consensus estimate of 44 cents a share. Guess said extraordinary competition hurt sales and said the fourth quarter is also at risk. The S&P Retail Index ($RLX), of which Guess is not a component, however, declined 2.5 percent. Among other decliners in the group were shares of Home Depot (HD), off 2.9 percent to $53.06, J.C. Penney (JCP), down 2.1 percent to $11.81, and Wal-Mart (WMT), off 1.9 percent to $48.06.
"Retailers are now more publicly noting the deleterious impact that high energy costs are having on consumer spending," said Tony Crescenzi, chief bond market strategist at Miller Tabak & Co. In its weekly sales update, for example, Wal-Mart said sales may have been impacted by higher gasoline prices and the fear of higher winter heating costs with customer frequency visits falling.
Earnings news
Micron Electronics (MUEI) posted fourth-quarter earnings of 24 cents a share, handily beating the First call estimate of 9 cents a share. The company earned 14 cents in the year-ago quarter. But the stock fell 75 cents to $11.63.
National Discount Brokers (NDB) reported a first-quarter loss from operations of 6 cents a share, less than the First Call estimate of a loss of 8 cents a share. The stock shed 50 cents to $31.50. Among other online brokers, Ameritrade (AMTD) slumped 25 cents to $17.25 and E-Trade (EGRP) fell 38 cents to $17.75. The Amex Securities Broker/Dealer Index ($XBD) declined 2.2 percent while the S&P Bank Index ($BIX) edged down 0.7 percent.
Treasury focus
Government issues continued to hover close to the unchanged mark. The 10-year bond added 2/32 to yield ($TNX) 5.835 percent and the 30-year Treasury bond lost 3/32 to yield ($TYX) 5.89 percent.
The day's dose of economic news came in the form of September consumer confidence, which rose to 141.9 versus the 140.8 level reported in August. Expectations for the September figure stood at 141.6. View Economic Preview, economic calendar and forecasts and historical economic data.
"The small rise in the index probably reflects the rise in stock prices through August. Hence, there is a good chance of a small decline next month. The trend in consumer confidence remains more or less flat -- there is no sign of the concern about the economic outlook evident in industrial surveys," said Ian Shepherdson, chief U.S. economist at High Frequency Economics.
In the currency sector, euro/dollar showed more signs of stabilizing after the recent freefall, climbing 0.8 percent to 0.8813. Expectations that the European Central Bank will again intervene to bolster the embattled currency kept the shorts at bay. Dollar/yen, meanwhile, lost 0.4 percent to 107.27.
Julie Rannazzisi is markets editor for CBS.MarketWatch.com. |
