Dow Industrials Tumble

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Dow industrials tumble

Blue chip index drops 215, Nasdaq Composite loses 15

By Roland Jones

MSNBC

THE DOW JONES INDUSTRIAL AVERAGE finished the day down 215.22 points, or 2.9 percent, at 7,286.27, closing at a level not seen since October 1997. The Dow added 78.65 points on Tuesday.

The Nasdaq Composite index was not as affected by the market’s drop, hugging the unchanged mark for most of the day, but still closing at a fresh six-year low, down 15.10 points, or 1.3 percent, at 1,114.11. It added 9.81 points on Tuesday.

Trading volume was active, bonds rose and the U.S. dollar was weaker. European stock markets closed mixed, but Japan’s Nikkei sank to a new 19-year low.

MORGAN CUTS GE’S OUTLOOK

Stocks fell sharply from the start of Wednesday’s trading session, reacting to some gloomy analyst outlooks on a number of blue-chip names, including General Electric, which fell 5.8 percent to $22 after investment bank Morgan Stanley cut its 2003 earnings estimate for the conglomerate, citing concerns over weakness in some of GE’s key businesses.

Shares of General Motors, another Dow issue, sank 7.7 percent to $31.01. Morgan Stanley cut its earnings outlook for the automaker, and also for Ford and DaimlerChrysler, citing lower production forecasts. Credit Suisse First Boston downgraded the auto sector on Tuesday.

Ford’s shares fell 7.7 percent to $7.15 and were among the most actively-traded issues on the New York Stock Exchange. And U.S.-traded shares of DaimlerChrysler fell 6.4 percent to $30.17.

An executive at Dow technology stock Hewlett-Packard, the number-one printer and personal computer maker, reportedly said he does not expect the technology industry to pick up again in 2003. H-P’s share price fell 3.3 percent $11.16.

And in afternoon trading Moody’s Investors Service cut J.P. Morgan Chase’s long-term debt ratings, citing concerns about the financial services giant’s business outlook. The Dow firm’s share price fell 6.9 percent to $15.45. Citigroup, another Dow financial issue, lost 3.4 percent, closing at $26.89.

“We’re seeing real disillusionment,” remarked Arthur Cashin, director of floor operations at UBS PaineWebber, noting that the 776 level is an important area of support for the Standard & Poor’s 500-stock index, a broad measure of the market’s health.

“If that level breaks, [traders] are afraid we’ll see a secondary wave of selling pressure,” Cashin said in a CNBC interview. The S&P 500 index closed Wednesday down 21.79 points, or 2.7 percent, at 776.76.

NYSE Most ActiveNasdaq Most ActiveAMEX Most ActiveNYSE Top % GainersNasdaq Top % GainersAMEX Top % GainersNYSE Top % DeclinersNasdaq Top % DeclinersAMEX Top % Decliners

Name Volume Price Change Percent Change

General Electric Company 48,248,000 22.00 -1.35 -5.78%

Ford Motor Company 47,827,200 7.15 -0.60 -7.74%

Motorola, Inc. 29,842,700 8.30 -1.45 -14.87%

J.P. Morgan Chase & Co. 27,852,900 15.45 -1.15 -6.93%

TXU Corp. 26,816,500 14.65 -2.53 -14.73%

Citigroup Inc. 23,790,800 26.89 -0.95 -3.41%

American Electric Power Company, Inc. 22,519,600 17.69 -5.22 -22.78%

Pfizer Inc 20,800,100 29.25 -0.45 -1.52%

AOL Time Warner Inc. 20,757,000 10.74 +0.07 +0.66%

Exxon Mobil Corporation 17,765,000 32.83 +0.13 +0.40%

Name Volume Price Change Percent Change

Sun Microsystems, Inc. 91,570,154 2.67 +0.20 +8.06%

Microsoft Corporation 61,811,835 43.99 -1.00 -2.22%

Dell Computer Corporation 31,662,768 25.00 -0.33 -1.30%

Siebel Systems, Inc. 23,764,156 6.32 +0.67 +11.86%

Yahoo! Inc. 19,682,760 9.98 +0.47 +4.96%

QLogic Corporation 18,957,256 19.97 -0.76 -3.67%

Maxim Integrated Products, Inc. 17,630,301 21.35 -0.04 -0.19%

Brocade Communications Systems, Inc. 16,178,261 5.60 +0.22 +4.13%

PeopleSoft, Inc. 15,691,270 14.11 +1.74 +14.07%

BEA Systems, Inc. 15,031,543 5.38 +0.43 +8.69%

Name Volume Price Change Percent Change

Nasdaq-100 Trust, Series 1 103,329,800 20.06 -0.10 -0.50%

SPDR Trust, Series 1 79,915,900 78.10 -2.27 -2.82%

DIAMONDS Trust, Series 1 20,803,900 73.12 -2.27 -3.01%

Semiconductor Holdrs Trust 10,821,200 17.67 -0.08 -0.45%

Ishares Msci Japan Index FD 5,394,600 6.57 -0.25 -3.67%

Financial Sel Sect Spdr FD 4,519,800 18.60 -0.82 -4.22%

Ishares Russell 2000 Idx Fund 3,878,000 65.10 -2.85 -4.19%

ML BIOTECH HLDR12/39 1,968,700 79.15 -0.65 -0.81%

Oil Service Holdrs TR 1,727,700 47.19 -1.41 -2.90%

Midcap Spdrs 1,611,800 68.35 -2.35 -3.32%

Name Volume Price Change Percent Change

Boston Celtics Limited Partnership 28,400 28.00 +16.65 +146.70%

Frontline Ltd. 161,100 5.74 +0.74 +14.80%

McDermott International, Inc. 411,700 3.67 +0.47 +14.69%

Quest Diagnostics Incorporated 4,633,300 57.38 +6.67 +13.15%

Banco Latinoamericano de Exportaciones, S.A. 16,100 2.61 +0.26 +11.06%

WHX Corporation 6,200 2.25 +0.22 +10.84%

De Rigo S.p.A. 31,800 3.80 +0.35 +10.14%

CGI Group Inc. 35,900 3.79 +0.32 +9.22%

Ual Corp 12.25% DEP'B'PFD 27,200 3.25 +0.25 +8.33%

SAP Aktiengesellschaft 2,488,200 11.65 +0.87 +8.07%

Name Volume Price Change Percent Change

Suntron Corporation 24,000 5.00 +1.26 +33.69%

Art's-Way Manufacturing Co., Inc. 2,700 4.50 +1.00 +28.57%

American Healthways, Inc. 1,175,068 15.46 +3.34 +27.56%

Seattle Genetics, Inc. 54,600 3.36 +0.72 +27.27%

Avalon Digital Marketing Systems Inc. 4,300 3.18 +0.68 +27.20%

Lumenis Ltd. 257,254 3.92 +0.66 +20.25%

Interep National Radio Sales, Inc. 900 2.45 +0.40 +19.51%

Medis Technologies Ltd. 42,580 4.85 +0.65 +15.48%

Extreme Networks, Inc. 4,391,693 2.80 +0.37 +15.23%

Margo Caribe, Inc. 500 4.00 +0.50 +14.29%

Name Volume Price Change Percent Change

Income Opportunity Realty Investors, Inc. 15,800 16.10 +1.50 +10.27%

Mor Stan 10% SPARQS 800 9.89 +0.69 +7.50%

Mor Stan 3% TRIGGERS CISCO SYS 20,400 4.55 +0.25 +5.81%

Merrrill Lynch 8%(STRIDES) 29,700 10.10 +0.55 +5.76%

Salomon SB 11% CISCO ELKS 2,200 5.15 +0.25 +5.10%

Morgan Stan DW 8% SPARQS 44,100 10.00 +0.45 +4.71%

Morg Stan D/W 8% RESET PERQS 10,800 2.50 +0.11 +4.60%

Ohio Art Company 500 12.00 +0.50 +4.35%

MS DW 9 PERQS XLNX 2,000 3.10 +0.12 +4.03%

Morg Stan DW 125 STK PART ACCT 10,000 6.50 +0.23 +3.67%

Name Volume Price Change Percent Change

Crompton Corporation 2,581,100 5.90 -3.25 -35.52%

MSC.Software Corporation 2,142,300 5.00 -2.45 -32.89%

Hypercom Corporation 330,600 1.91 -0.89 -31.79%

Txu Europe Cap I 9 3/4 Toprs 117,900 6.20 -2.65 -29.94%

Culp, Inc. 66,500 4.20 -1.55 -26.96%

LEHMAN ABS 7.2 G-P 11,900 10.25 -3.65 -26.26%

Mission Capital 8.50% 'MIPS' 56,600 14.50 -4.51 -23.72%

Staten Island Bancorp, Inc. 1,479,000 12.97 -3.93 -23.25%

Teledyne Technologies Incorporated 569,100 13.50 -4.00 -22.86%

American Electric Power Company, Inc. 22,519,600 17.69 -5.22 -22.78%

Name Volume Price Change Percent Change

Covista Communications, Inc. 85,000 2.03 -0.97 -32.33%

Engel General Developers Ltd. 800 2.50 -1.00 -28.57%

ELXSI Corporation 2,900 2.60 -0.95 -26.76%

DynTek Inc. - Class A Warrants 500 1.51 -0.50 -24.88%

California First National Bancorp 25,633 10.45 -3.21 -23.51%

Presstek, Inc. 95,500 2.20 -0.60 -21.43%

Metron Technology N.V. 24,639 1.69 -0.44 -20.66%

USA INTERACTIVE WTS 2/4/09 48,500 4.10 -1.00 -19.61%

Dendreon Corporation 386,515 2.81 -0.68 -19.54%

First Consulting Group, Inc. 77,900 4.92 -1.19 -19.48%

Name Volume Price Change Percent Change

Medtox Scientific, Inc. 28,400 5.39 -1.21 -18.33%

Monongah Power 4.50%cm C PFD 680 53.80 -11.45 -17.55%

Bentley Pharmaceuticals, Inc. 78,900 6.50 -1.00 -13.33%

Frequency Electronics, Inc. 30,400 5.20 -0.80 -13.33%

Emerson Radio Corp. 153,100 2.51 -0.35 -12.24%

DepoMed, Inc. 16,100 2.05 -0.25 -10.87%

Montana Mills Bread Co., Inc. 10,100 4.00 -0.43 -9.71%

Phoenix Footwear Group Inc. 15,700 6.69 -0.71 -9.59%

Utilities Holders Trust 148,000 51.10 -5.08 -9.04%

Utilities Sel Sect Spdr Fund 966,800 15.23 -1.42 -8.53%

CORNING LOWERS SALES OUTLOOK

In Wednesday’s other company news, Corning said its third-quarter sales would be at the low end of its estimates because of the telecom sector’s lingering decline. The fiber-optic cable maker also indicated more job cuts are ahead. Corning’s share price jumped 11.8 percent to $1.23.

Shares of utility firm Dominion Resources fell 12.8 percent to $36.49 after saying it plans to slash its capital spending in an effort to shore up its balance sheet and keep creditors at bay. The broader utility sector slumped, with the Dow Jones utilities index down 9.6 percent.

Health care products maker Abbott Laboratories said its third-quarter profit rose and said a restructuring plan will mean it cuts 3 percent of its workforce, or 2,000 jobs. The firm also said it will take a one-time charge of between $100 million and $125 million.

Quest Diagnostics, the largest U.S. provider of diagnostics testing services, saw its shares rally 13.2 percent to $57.38 after saying its third-quarter earnings and sales will come in above Wall Street’s expectations because of favorable testing trends.

And late in the trading session drug firm Merck confirmed its earnings guidance for 2002, saying it will be at the same level as 2001 results. Earlier, Raymond James downgraded the drug firm saying it will warn by early December that earnings will fall short of expectations. Merck’s stock price recovered from an early slide, closing down 0.8 percent at $45.63.

Also, Goldman Sachs strategist Abby Joseph Cohen, who is known for her bullishness, made a bearish call on the market, cutting her 12- to 18-month target for the S&P’s 500-stock index to 1,150 from 1,300, and to 10,800 from an earlier estimate of 11,300 for the Dow industrials.

Cohen also said stocks are undervalued at current levels. Once followed assiduously by Wall Street, Cohen has lost some of her credibility of late, as some of her optimistic forecasts have been followed by tumbling stock valuations.

Goldman strategist slashes outlook

WEST COAST PORTS TO REOPEN

Stocks closed Tuesday with moderate gains, snapping a four-session losing streak, as investors welcomed federal action aimed at bringing to an end a West Coast port lockout and strong earnings from companies like soft-drink giant PepsiCo.

After Tuesday’s close, a federal judge granted President Bush’s request to end the port lockout on the West Coast, where ports had remained closed for 10 days in a labor dispute that has cost the U.S. economy up to $2 billion a day. Shipping companies now face the task of clear backed-up cargo.

Stocks had fallen to multi-year lows in the trading sessions prior to Tuesday, as investors worried about the economy, third-quarter earnings and the possibility of war with Iraq.

Some on Wall Street may be wondering if the market’s sell-off over the last few weeks presents a good buying opportunity. Not necessarily, says Donald Straszheim, a former Merrill Lynch strategist who now runs Straszheim Global Advisors.

In the beaten-down technology sector, for example, Straszheim puts forward the view that some of the names that have fallen the farthest — including former Wall Street darlings like Lucent Technologies and JDS Uniphase — could keep sliding, since their earnings have fallen faster than their share prices.

“Their P/Es show them to be even more expensive now,” Straszheim wrote in a research note sent to investors after Tuesday’s close.

NIKKEI AT NEW 19-YEAR LOW

In Europe, the main market averages closed mixed, but Tokyo’s benchmark 225-issue Nikkei stock average fell 169.56 points, or 1.95 percent, sinking to a fresh 19-year low amid worries about the fallout from a tougher government position on banks’ bad loans.

The U.S. dollar was weaker, trading at 98.70 cents to the euro and 123.54 yen to the dollar, compared with 97.86 cents and 124.29 yen late Tuesday in New York.