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To: pallmer who wrote (4525)	1/3/2003 11:28:30 AM
From: pallmer	Read Replies (1) \| Respond to of 29599

-- =WSJ.COM: US Stocks Down As Earnings News Weigh On Market -- By Ian McDonald Of THE WALL STREET JOURNAL ONLINE NEW YORK (Dow Jones)--There was evidence that the housing boom is and isn't running out of steam, as shaky earnings news weighed on stock prices late Friday morning. Optimists were buoyed by a rosy construction spending report from the Commerce Department early Friday. But profit warnings from several firms, including home-improvement titan Home Depot, rained on the embers Thursday's fiery rally. Recently, the Dow Jones Industrial Average slid 21 to 8587. The Standard & Poor's 500 was off 3 to 905.81 and the tech-laden Nasdaq Composite fell 7.25 to 1377.69. The Russell 2000 was down 2 to 390.58. Friday's shiftless start came on the heels of Thurday's breathless rally. The major stock indices kicked off 2003 by gaining more than 3% each, while bonds fell hard. Bonds were down again Friday, but stocks were too. Construction spending rose in November for the fourth straight month, helped by record activity in the housing market. Total spending on homes, roads and hospitals rose 0.3%, the Commerce Department said Friday. November's gain was stronger than the 0.1% rise economists were expecting, according to a survey by Dow Jones Newswires and CNBC. That was tempered by lingering bad news on the home improvement front dispatched Thursday evening. Home Depot said it cut its earnings expectations for its fiscal year ending in February. The company predicted that sales at stores open at least a year will fall as much as 10% in its fourth quarter. The home-improvement retailer had expected same-store sales to fall 3% to 5% in the quarter. The company's shares fell 13% to $21.65 on the Big Board. At the same time, Home Depot's rival, Lowe's, said it expects same-store sales to increase 2% to 4% in the fourth quarter. Shares of Lowe's fell 6% to $37.05. Thursday evening also brought news that Guidant is likely to scuttle its plan to buy Cook Group, after early results from a clinical trial of a drug-coated stent failed to meet performance targets outlined in the merger agreement. Johnson & Johnson and Boston Scientific, two leaders in the race to develop drug-coated stents, could get a boost from elimination of what could have been a feisty new entrant. Guidant shares fell 7%, to $29.40, while Johnson & Johnson jumped 3% to $56.71 and Boston Scientific gained 3% to 44.11, all on the Big Board. J.P. Morgan Chase said it would take a $1.3 billion charge for the fourth quarter, largely to settle litigation over its involvement with Enron. Included in the charge is $400 million it will swallow to settle a suit with insurers over $1 billion in Enron-related losses. The Wall Street firm's shares were up 0.2% to $25.50 on the Big Board. Cadence Design Systems slashed its estimates for the 2002 fourth quarter late Thursday, citing a greater percentage of subscription-license product bookings than expected. The maker of semiconductor-design software said it expects to report fourth-quarter pro forma earnings of two cents to four cents a share, well below the 14 cents to 16 cents a share it forecast in October. The company's shares tumbled 21% to $9.20 on the Nasdaq. Radio Shack cut its profit forecast early Friday, blaming weak sales of DVD accesories, radio-controlled toys and Sprint PCS wireless products. The company expects to earn 58 cents to 60 cents for the year, while analysts expected a 65-cent profit. The electronics retailer's shares fell 1% to $19.58 on the Big Board. Sprint PCS shares fell after Radio Shack partially blamed tepid demand for the company's offerings for its shortfall. Shares of the wirless outfit fell 7% to $44.48 on the Big Board. There was some good news Friday. Kenneth Cole Productions, the accessory retailer, raised its fourth-quarter earnings outlook to at least 36 cents a share from its previous earnings projection of 32 cents to 34 cents a share. A Thomson First Call survey of four analysts produced a fourth-quarter earnings estimate of 34 cents a share. The company's shares rose 8% to $23.70 on the Big Board. Walgreen, the largest U.S. pharmacy chain, reported a 24.6% rise in quarterly profit as its sold more profitable generic drugs and saw sakes gains from new stores. The company's shares rose 5% to $31.55 on the Big Board. Further out, traders are looking to Tuesday when President Bush will outline his plan to kick-start a plodding economy. In U.S. market action late Friday morning: Stocks fell. On the Big Board, 1,374 stocks rose and 1,588 fell. On the Nasdaq 1,155 stocks rose, while 1,583 retreated. Bonds declined. The benchmark 10-year Treasury note fell 5/32 points. The yield, which moves inversely to price, rose to 4.050%. The 30-year bond was down 10/32 to yield 4.975%. The dollar weakened. In New York it traded at 119.64 yen down from 120.05 yen, while the euro rose against the dollar to $1.0423 from $1.0358. For continuously updated news from The Wall Street Journal, see WSJ.com at wsj.com. (END) Dow Jones Newswires 01-03-03 1125ET- - 11 25 AM EST 01-03-03 03-Jan-2003 16:25:00 GMT Source DJ - Dow Jones