US Stocks Lower; JP Morgan, Citigroup Weigh On The DJIA
05 Aug 10:32
By Shaheen Pasha
Of DOW JONES NEWSWIRES
NEW YORK (Dow Jones)--The U.S. equities markets are trailing lower once again
as investors - still reeling from last week's barrage of disappointing economic
data - sell on fears of a double-dip recession.
The July Institute of Supply Management non-manufacturing business index
reported Monday dropped to 53.1 from 57.2 in June. That's just adding more
pessimism into a market already shaken over the prospects for the economic
recovery.
"The economic recovery appears to be slowing to such an appreciable point
that many investors just don't want to put money to work in this market," said
Alan Ackerman, market strategist at Fahnestock & Co. "No one is certain that
we've made a bottom and there is a strong emotional undertow in the market."
The Dow has fallen 63 points to 8249, the Nasdaq Composite Index is down 7 to
1241 and the Standard & Poor's 500 Index has lost 7.25 to 857.
The Russell 2000 Index of small-cap stocks has gained less than a point to
377 and the Standard & Poor's 600 Index is up less than a point to 190.
The Dow Jones Industrial Average was expected to get a bit of help from
blue-chip Procter & Gamble, which managed to beat fourth quarter analysts
consensus estimates by two cents. But P&G is trading lower, putting more
pressure on the index. The consumer products company returned to profitability
in the quarter, earning $910 million due to growth in its health and
beauty-care businesses but it expects fiscal first-quarter core earnings of
$1.07 to $1.10 a share, compared with analyst views of $1.09. P&G has dipped
1.71, or 1.9%, to 88.13.
Financial services are putting the most pressure on blue chips. J.P. Morgan
and Citigroup are falling lower after Lehman Brothers rated the companies
equal-weight under its new rating system. That's compared to the strong buy
rating it held on the stocks underits old system. Lehman was cautious about
the companies' exposure to Latin America as well as the negative news related
to Enron. J.P. Morgan has dropped 92 cents, or 3.9%, to 22.92 while Citigroup
has fallen 95 cents, or 3.1%, to 29.92.
Lehman Brothers is more bullish on gaming stocks, however. Analyst Joyce
Minor says her outlook for the gaming industry is positive because trends in
the important Las Vegas market have rebounded faster than expected with
depressed gaming revenues continuing to improve sequentially and revenue per
available room expected to turn positive in the third quarter. Some of the
stocks getting a boost include MGM Mirage up 48 cents, or 1.5%, to 33 and
Mandalay Resort Group, ahead 1.24, or 4.7%, to 27.74 Mandalay was also upgraded
to strong buy from buy at Credit Suisse First Boston.
Lehman analyst Tim Luke updated his outlook for Cisco Systems as well, in
conjunction with the change in the brokerage firm's stock rating system. Cisco,
once rated at strong buy, is now rated at equal weight under the new system.
Cisco Systems has dropped 44 cents, or 3.7%, to 11.45 ahead of its quarterly
report due after the closing bell Tuesday.
Competition issues are weighing on shares of ESS Technology. An article in
Barron's raised concerns that the company, which makes chips for DVD and video
compact-disc players, may face an onslaught of Taiwanese competition that could
take away market share for the company. ESS Technology has shed 1.44, or 12.3%,
to 10.26.
Media giant AOL Time Warner is dealing with more legal worries. A lawsuit
filed last week by the California State Teachers' Retirement System - the
nation's third-largest public pension fund, which lost about $9 million on
Homestore Inc. shares - alleges that Homestore.com boosted revenue through
complex third-party transactions involving AOL Time Warner's AOL unit. AOL has
dropped 17 cents, or 1.7%, to 10.13 while Homestore has shed 4 cents, or 5.1%,
to 75 cents.
It's not allbad news Monday. Advanced Micro Devices has added 39 cents, or
5.3%, to 7.70 on a Barron's report that the company has new products that
promise to speed it's recovery and allow it to battle Intel in the most
lucrative markets.
JDS Uniphase and Bookham Technology are also climbing higher on the heels
SoundView Technology Group's upgrade to neutral from underperform. JDS Uniphase
has gained 27 cents, or 11.3%, to 2.65 while Bookham has jumped 26 cents, or
29.1%, to 1.15.
Volume on the New York Stock Exchange is 259 million shares, with down volume
ahead of up, 171 million to 85 million. Decliners are ahead of advancers, 1,525
to 1,218.
Volume on the Nasdaq is 235 million shares, with down volume outpacing up,
125 million to 105 million. Decliners are ahead of advancers, 1,465 to 1,126.
-By Shaheen Pasha, Dow Jones Newswires; 201-938-2312;
shaheen.pasha@dowjones.com
(END) DOW JONES NEWS 08-05-02
10:32 AM |
