<font color=blue>MARKET SNAPSHOT--11:18--Major averages turn negative
Early gains quick to fade
By Julie Rannazzisi, CBS.MarketWatch.com
Last Update: 11:18 AM ET Sep 27, 2000
NEW YORK (CBS.MW) - The major averages slumped Wednesday as investors were unable to shake off earnings worries.
Shares of Eastman Kodak, which produced a bruising sell off in the blue-chip barometer Tuesday in the wake of its profit warning, continued to sting the Dow. Shares slumped 10 percent to $41.63 and was the index's downside leader.
The steady flow of earnings warnings continues to sap enthusiasm from investors and challenge the resolve of market bulls.
"The broader negative news on the economy and currencies are taking their toll on stocks, and this weakness will likely continue until the third quarter earnings reports start to provide a better showing in mid-October. Until then, dodging the land mines will be the biggest challenge for investors," said Robert Dickey, chief technical strategist at Dain Rauscher Wessels.
Inside technology, a slide in Internet stocks caused the Nasdaq's gains to evaporate while chip, networking and computer hardware shares remained positive. In the broad market, utility, drug and airline shares slumped while biotech and retail stocks improved.
Oil shares also gained ground as crude prices spiked after four straight days of declines. November crude added 35 cents to $31.85. The American Petroleum Institute reported late Tuesday that crude supplies for the week ended Sept. 22 dropped 2.2 million barrels versus expectations for a rise.
The Dow Jones Industrials Average ($DJ) lost 9 points, or 0.1 percent, to 10,621.
Keeping the Dow negative were shares of Eastman Kodak, Procter & Gamble, Boeing and Caterpillar. Witnessing upside action were shares of Intel, Hewlett-Packard and Merck.
Coca-Cola (KO) gained 38 cents to $55.31 after announcing that third-quarter unit-case volume would increase about 4 percent worldwide, reassuring analysts that the beverage giant would match earnings forecasts for the period. The stock has already risen 4 percent during the first two trading days of the week.
The Nasdaq Composite ($COMPQ) fell 18 points, or 0.5 percent, to 3,673 while the Nasdaq 100 Index ($NDX) was close to the unchanged mark.
The Standard & Poor's 500 Index ($SPX) edged down 0.1 percent while the Russell 2000 Index ($RUT) of small-capitalization stocks gained 0.1 percent.
Separately, volume stood at 247 million on the NYSE and at 409 million on the Nasdaq Stock Market. Breadth improved, with advancers outpacing decliners by 12 to 11 on the NYSE and by 17 to 14 on the Nasdaq.
Specific movers
Internet stocks took a drubbing for a third straight session. Priceline.com (PCLN) said third-quarter revenue would come in below expectations. The company estimates revenue to come in at $360 to $380 million versus revenue of $152.2 million in the year-ago quarter. The company cited a shortfall in revenue from the sale of airline tickets, which is expected to be $20 to $25 million less than levels registered during the second quarter of 2000. First Call expects a one-cent loss for the quarter. Shares fell for the third straight session, plunging $7.52, or 40 percent, to $11.13.
Silicon Storage (SSTI) released a positive pre-announcement, saying its sees third-quarter earnings-per-share above 35 cents versus the first call estimate of 28 cents a share. The company said demand continues to outstrip supply, with the situation expected to continue well into 2001. The stock rose $2.30, or nearly 10 percent, to $28.38.
Shares of 3Com (COMS) swelled $3.25, or 23 percent, to $17.19. Late Tuesday, the company reported a loss from operations of 12 cents a share in its first quarter, cruising past analyst's estimates of a loss of 33 cents a share.
Treasury focus
Treasury prices struggled as inflation concerns dampened enthusiasm.
The 10-year bond lost 7/32 to yield ($TNX) 5.835 percent while the 30-year Treasury bond slipped 1/8 to yield ($TYX) 5.89 percent.
The market came under pressure following a Washington Post article. Citing government sources, John Berry said a calculating glitch at the Bureau of Labor Statistics would produce upward revisions to the consumer price index. The revision could push up the CPI for the year by about 0.1 to 0.3 percentage points.
Commenting on the article, Ian Shepherdson, chief U.S. economist at High Frequency Economics, said the upward revisions -- which would impact both the headline and core inflation figures - would put the rate on a clear upward trend. While the revision would not be high enough to prompt the Fed into a near-term rate hike, Shepherdson said it makes him even more certain that a cut in rates isn't in the cards anytime soon.
In economic news, Wednesday saw the release of August durable goods orders, which gained 2.9 percent compared to expectations for a 2.4 percent increase. Excluding transportation, orders added 1.9 percent. View Economic Preview, economic calendar and forecasts and historical economic data.
In the currency market, the euro climbed for a second straight session against the dollar, rising 0.3 percent to 0.8851. Dollar/yen added 0.1 percent to 107.70.
Julie Rannazzisi is markets editor for CBS.MarketWatch.com. |
