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NEW YORK -- Investors irked by poor earnings and unnerved by the presidential election limbo sent stocks sharply lower today with the Nasdaq composite index falling to a new closing low for the year. Election uncertainty,
Bond prices rise
technology stocks
worry Wall StreetAssociated Press
The tech-focused Nasdaq ended down 171.36, or 5.4 percent, to close at 3,028.99. The last time the Nasdaq finished lower was a year ago, on Nov. 3, 1999, when it closed at 3,028.51.
Other indicators also fell sharply. The Dow Jones industrial average finished off 231.30, or 2.1 percent, at 10,602.95. The broader Standard & Poor's 500 index fell 34.16, or 2.44 percent, to 1,365.99, a loss of 2.44 percent.
Declining issues outnumbered advancers by a nearly 2-to-1 ratio with 1,919 down, 888 up and 480 unchanged on the New York Stock Exchange, where volume was about 960 million shares, down from about 1.1 billion yesterday.
The NYSE composite index fell 9.76 to 646.44; the American Stock Exchange composite dropped 11.59 to 899.35; the Russell 2000 index fell 14.43 to close at 480.90.
Puzzled about how to invest amid the political uncertainty, investors have focused on what they do know: earnings are key. They're sticking to their pre-election pattern of selling high-tech issues whose profit outlook is poor. They're also punishing nontech stocks, particular those in the retailing sector, for earnings shortfalls.
Dell Computer was among the technology companies to stumble, losing $5.25, or 18.5 percent, and selling at $23.13. Dell reported late yesterday it cut its revenue outlook for the next fiscal year.
Analysts later downgraded Dell, along with computer chip maker Intel, which finished off $4.38 at $37. Another chip maker, Sun Microsystems, slipped $8.44 to $89.19.
Retailers, which have battled sluggish sales for much of this year, also suffered on Wall Street. Gap lost $1.06, ending Friday at $23.69. The clothing retailer reported a 41 percent drop in third-quarter profits yesterday. Catalog retailer Lands' End dropped $2.07, or nearly 9 percent, to $21.96. Yesterday, it reported disappointing third-quarter earnings, missing analysts' forecasts by 5 cents a share.
Retailing and stocks in general are in for more losses, predicted Charles White, portfolio manager at Avatar Associates. He cited a dip in consumer confidence, a slowing economy and the unresolved election.
"This is a consumer who already is already thinking things are not as good as they once were," White said. "You lump on top of that the political uncertainty and you just have a consumer who is already shaky and getting shakier in an economy that really depends on the consumer."
What likely added to the markets' decline today was investors' uncertainty about what might happen with the election over the weekend. Analysts expect investors will do more selling than buying across market sectors until the election is sorted out. That is expected to take at least until the end of next week.
"We are going to see quite a bit of weakness in the market until this is resolved. We are looking at a market that is looking for a leader," said Alan Ackerman, executive vice president for Fahnestock & Co. "With no immediate end in sight, my sense is that sellers will be busy bees over the next few sessions."
NEW YORK -- U.S. Treasury notes rose for a third day as stocks fell and the unresolved presidential election prompted investors to seek safety in U.S. government securities. Bond prices in
flight to qualityBloomberg News
"Election worries plus earnings worries plus economic worries aren't good for corporate America," and are driving investors out of stocks and into Treasuries, said Douglas Johnston, chief government bond strategist at Lehman Brothers Inc.
The current 10-year note rose 7/32, or $2.19 per $1,000 face amount, to a price of 99 21/32. Its yield fell 3 basis points to 5.79 percent. The most active two-year note rose 3/32 to 99 23/32. Its yield fell 5 basis points, the most among Treasuries. The 30-year bond fell 1/32 to 105 10/32, where it returned 5.87 percent, unchanged from late yesterday.
Notes pared gains and bonds slipped in late morning trading as the three major U.S. stock measures briefly came off lows, said Jim Caron, a fixed-income strategist at Merrill Lynch & Co.
With expectations the election process will be drawn out, "the market is likely to lose some of the flight to quality bid until we are near a decision," Caron said. "We still have a president, so we are not without a leader."
Alan Kral, who manages $700 million at Trevor, Stewart, Burton & Jacobsen Inc., is holding on to his Treasury holdings and plans to buy more when he receives new cash. "The credit quality of Treasuries hasn't been diminished and won't" be, regardless of who ends up in the White House, he said.
Treasuries got a boost this week as economic reports pointed to a slowing economy and tame inflation, increasing speculation the Federal Reserve's next move will be a rate cut, though such action isn't likely before the second quarter of 2001.