NEW YORK >> Reduced outlooks from chip manufacturer Intel and drug maker Biogen sent technology stocks sharply lower today, but a late session rebound limited the damage in the broader market.
Markets end lower, but
late rally minimizes fall
By Lisa Singhania
Analysts were not impressed by the comeback, however. They attributed it to bargain hunting following two weeks of mostly losing sessions rather than any fundamental shift in investor confidence.
"The semiconductor sector got hit pretty hard today, but the rest of the market pretty much held up. That's good to see," said Mike Kayes, chief investment officer at Eastover Capital. "But the big picture is still that the market needs to see earnings improve, and that hasn't happened yet."
Advancing issues led decliners 4 to 3 on the New York Stock Exchange in heavy trading. Volume came to 1.80 billion shares, compared with 1.59 billion shares yesterday.
The Dow Jones industrial average closed down 34.97, or 0.4 percent, at 9,589.76, after falling as much as 152 points and then briefly showing a gain. Yesterday, the average fell 172 points.
With the exception of the Russell 2000 index, which gained 5.22 to 470.51, broader stock indicators were also lower. The technology-centered Nasdaq composite index took the biggest hit, losing 19.40, or 1.3 percent, to close at 1,535.48. The Standard & Poor's 500 index lost 1.62, or 0.2 percent, to 1,027.53.
For the week, the Dow lost 3.4 percent, the Nasdaq tumbled nearly 5.0 percent and S&P fell 3.7 percent. The Nasdaq and S&P are also closing in on their post-Sept. 11 lows; the Nasdaq has 112 points to go; the S&P is short by 61.
The price of the Treasury's 10-year note was down 21/32 point today at 98 9/16, while its yield rose to 5.06 percent from 4.98 percent late yesterday. Two-year Treasury notes were down 3/32 point and yielded 3.13 percent, up from 3.07 percent yesterday.
The bulk of the declines today appeared concentrated in specific stocks that investors felt had disappointed them -- or had the potential to do so.
Intel fell $5, or 18.5 percent, to $22 after it lowered its second-quarter sales forecast because of lower-than-expected demand for personal computer processors in Europe. The news triggered selling across the chip sector. Intel rival Advanced Micro Devices slid 80 cents to $9.81, while Applied Materials, which makes equipment for semidconductor production, fell 30 cents to $20.62.
Investors also bid Biogen lower, sending the pharmaceutical company down $5.54, or 11.6 percent, to $42.16, after Biogen reduced its financial estimates for the second quarter and full year, citing difficult market conditions.
Reports of more accounting woes also pressured the market. Tyco dropped $4.50, or 30.8 percent, to $10.10 on concerns the company would not shed its lending unit as quickly as expected, and fears that a government investigation of the company is broadening.
"Investors are pretty glum right now. They are concerned that all of the economic stimulus we saw throughout 2001 is not producing the kind of economic response that we were anticipating," said Charles G. Crane, strategist for Victory SBSF Capital Management.
Overseas, Japan's Nikkei stock average fell nearly 1.2 percent. In Europe, Germany's DAX index slipped 1.0 percent, Britain's FTSE 100 lost 0.8 percent, and France's CAC-40 dropped 1.9 percent.