Another correction!
CORRECTED - U.S. stocks fall, Microsoft offers hope after-hours
In Oct. 18 NEW YORK item headlined "CORRECTED-U.S. stocks
fall, Microsoft offers hope after-hours" please read in 12th
paragraph ... The stock fell after the company reported
first-quarter earnings of 8 cents per share, beating analysts'
estimates of 6 cents per share ... instead of ... 4 cents per
share, falling short of analysts' estimates ... (corrects
figure and shows the company exceeded estimates rather than
fell below them).
A corrected repetition follows.
(Updates with earnings released after the bell and
after-hours stock prices, plus analyst comments)
By Emma-Kate Symons
NEW YORK, Oct 18 (Reuters) - U.S. stocks on Wednesday first
spiraled to year lows and the Dow Jones industrial average
crashed below the psychologically important 10,000 barrier, but
solid earnings from leading software maker Microsoft after
hours gave some hope the markets may reclaim some losses on
Thursday.
"The earnings are being viewed by the market in the
after-market as favorable," said Dan Ascani, president and
director of research at Global Market Strategists Inc,
Gainesville, Ga.
"We ought to see a favorable reaction to them tomorrow but
there's some general concern among about whether the market has
bottomed -- everyone seems to be fixated on this and
institutions will selectively pick stocks."
But Ascani said "it's hard to say" whether the Dow will
stay above the critical 10,000 mark, because of lingering
worries about future earnings.
The Dow Jones industrial average <.DJI> in the morning
plummeted 438 points, its biggest intraday drop since April 14,
to a 19-month low of 9,651.68.
But the Dow ended at 9,975.02, down 114.69 points, or 1.14
percent. That was the first time the Dow has closed below the
crucial 10,000 level since mid-March.
The Nasdaq Composite Index <.IXIC> first fell almost 6
percent, or close to 200 points, early in the day to a new year
low of 3,026.11.
But the technology-rich Nasdaq partially rebounded and
ended down just 42.40 points, or 1.32 percent, at 3,171.56,
based on the latest available figures. The Nasdaq got a lift
from the strength of Sun Microsystems <SUNW.O> and telecom
giant WorldCom Inc. <WCOM.O>.
The broader Standard & Poor's 500 Index <.SPX>, ended down
7.84 points, or 0.58 percent, at 1,342.13.
In brisk after-hours trading dominated by profit reports
from prominent technology companies, Microsoft saw its shares
surge more than 6 percent, to $54-7/8 on the Instinet brokerage
system. Microsoft rose after the release of
better-than-expected earnings, and bullish comments about its
key product Windows 2000.
After the close of regular trading, Nasdaq 100 futures were
up 55 points, to 3,210.00, reversing an earlier drop of 15
points. The Dow industrials futures were off 97 points, at
10,043, and the S&P 500 futures rose 7.40 points, to 1,360.20.
Extreme Networks Inc. <EXTR.O>, which makes computer
networking equipment, was battered after-hours, falling to
$96-1/4 on Instinet, from its regular close at $107-1/8. The
stock fell after the company reported first-quarter earnings of
8 cents per share, beating analysts' estimates of 6 cents per
share, according to research firm First Call/Thomson Financial.
Microsoft reported after the bell that its first-quarter
net profit in its fiscal first quarter ended Sept. 30 rose 18
percent to $2.58 billion, or 46 cents per share, before
including an accounting change. This was up from $2.19 billion,
or 40 cents per share, a year earlier. The results topped
analysts' expectations of 41 cents per share, according to
research firm First Call/Thomson Financial.
The stock of America Online <AOL.N>, the No. 1 Internet
services provider, slipped slightly on Instinet, to $45-1/2,
from a regular close of $46.91. The modest drop came after the
company posted first-quarter earnings that doubled from a year
earlier as subscriber, advertising and e-commerce revenues
drove growth.
The shares of Nokia Corp. <NOK.N> were up $2, at $32 after
the bell, following the surprise news the world's largest
mobile phone maker would post third-quarter results on Thursday
-- a week ahead of plan.
Texas Instruments Inc. <TXN.N>, the leading maker of
computer chips for mobile phones, said after the bell its
third-quarter net income rose 31 percent, pushing shares up
modestly to $37-13/16 on Instinet.
The shares of Broadcom Corp. <BRCM.O>, a high-speed
communications semiconductor maker, also rose to $215
after-hours, up from a regular close of $209-3/8. The shares
spiked after the company reported better-than-expected
third-quarter earnings.
E-business software maker Ariba Inc. <ARBA.O> saw its
shares tumble after it reported a fourth-quarter net loss of
$1.1 million, or nil per share, compared with a net loss of
$4.6 million, or 3 cents per share, a year earlier. Ariba last
traded on Instinet at $117-3/4, down from a standard close of
$127-1/16.
Investors, who this year have stomached extreme price
swings, in the morning looked into the abyss. Stocks were in a
freefall, led by an 18-point drop in the shares of computing
titan International Business Machines Corp.<IBM.N>.
"It was a gut-wrenching opening, but a lot of investors
hoped that this represented capitulation lows," said Arnold
Berman, technology strategist at Wit SoundView.
Disappointing sales growth at IBM reignited fears of
slowing corporate profit growth; new data showed
higher-than-expected inflation at the consumer price level; the
euro, the single European currency whose weakness has hurt U.S.
companies' exports, hit yet another low, and mutual fund
managers sold money-losing shares to offset tax liability on
gains realized earlier in the year.
Tech stocks got a boost when Sun, a leading maker of
computers that serve up Web pages, inadvertently posted strong
quarterly results on its Web site ahead of a scheduled release
of its earnings after the close of regular trading.
"I just want the day to end," said a Charles Schwab
customer looking at stock quotes at the discount brokerage's
Wall Street office during his lunch hour. "But I might consider
it a buying opportunity tomorrow and add to my positions."
Other investors already started to act on that idea
Wednesday afternoon, and the market started to recover some of
its earlier losses.
"It's not fun, but we continue to look for good companies
that are on sale," said Irene O'Neill, a fund manager with
Evergreen Asset Management, which helps to oversee $80 billion
in assets. "Dow 10,000 is a broad negative for the market, but
the fundamentals are more important."
IBM's drop weighed heavily on the Dow, as did a sharp drop
in the stock of commercial and investment bank J.P. Morgan &
Co. Inc. <JPM.N>
REUTERS
Rtr 10:32 10-19-00
Copyright 2000, Reuters News Service |
