Starbulletin.com


Closing Market Report

Star-Bulletin news services

Tuesday, March 23, 1999

Earnings jitters
send stocks reeling

The Dow loses more ground in its
10,000 chase while the S&P 500
and Nasdaq also fall

NEW YORK -- Stocks dropped sharply today as investors' growing nervousness about earnings wiped out any hopes that the Dow Jones industrials might soon close above 10,000.

At the close of trading on Wall Street, the Dow was down 218.68 at 9,671.83, losing ground for the third session in a row after flirting with 10,000 last week. It was the second-worst point loss for the Dow this calendar year, pushing the blue-chip index below 9,700 for the first time since March 9.

Broader stock indicators also were hit hard.

The Standard & Poor's 500 index fell 34.87 to 1,262.14 and the technology-heavy Nasdaq composite index fell 73.10 to 2,322.84.

Decliners outnumbered advancers by a 7-to-2 margin on the New York Stock Exchange, with 661 up, 2,338 down and 510 unchanged.

NYSE volume totaled 814.28 million shares vs. 656.21 million yesterday.

The NYSE composite index fell 15.04 to 595.45, and the American Stock Exchange composite index fell 14.04 to 703.32.

The Russell 2000 index of smaller companies fell 9.83 to 383.37.

The earnings fears spread today after Merrill Lynch warned that Coca-Cola Co.'s sales growth will be slowed by economic crises in Latin America and Japan. Coke shares were down $1.81 at 65.871/2.

"People are worried about corporate earnings, the most recent being Coke," said Larry Lawler, manager of equity trading at Dreyfus Corp. "But the bottom line is that people are nervous about the (Dow) breaking through the 10,000 mark, so you're seeing some profit-taking and nervousness."

Stock investors have been concerned for weeks about technology company earnings. Dell Computer Corp., which lost ground last week after a Donaldson, Lufkin & Jenrette analyst lowered his earnings estimates, was down another $2.19 today at $35.69.

And Dow component International Business Machines Corp., which sank last week after Morgan Stanley Dean Witter voiced concerns about revenue growth, was down another $1.25 today at $165.75.

Profit-takers punished Internet stocks heavily, although there was no direct news from that sector today. America Online Inc. skidded $8.75 to $121.25.

"There is mounting concern about what earnings are going to look like in the first quarter, particularly for technology companies, and without tech stocks, the market's in trouble," said William Meehan, market analyst at Cantor Fitzgerald.

Meehan said investors were also worried about interest rates. While rates were modestly lower today, with the 30-year Treasury bond yield down to 5.56 percent, any yield above 5.5 percent will disturb both the stock and bond markets, Meehan said.

Moreover, the credit markets were getting a flood of new bonds that could also push rates higher, with AT&T selling $8 billion worth of bonds today, and the Treasury's auction of $15 billion in two-year notes tomorrow.

Overseas, Japan's Nikkei stock average slid 2.2 percent as investors locked in profits following the index's steep gains last week.

European stock markets were lower amid concern over the economic outlook in the region. Germany's DAX index fell 2.07 percent, Britain's FT-SE 100 was down 0.74 percent and France's CAC-40 was down 1.74 percent.



E-mail to Business Editor


Text Site Directory:
[News] [Business] [Features] [Sports] [Editorial] [Do It Electric!]
[Classified Ads] [Search] [Subscribe] [Info] [Letter to Editor]
[Stylebook] [Feedback]



© 1999 Honolulu Star-Bulletin
https://archives.starbulletin.com