NEW YORK >> Stocks fell today as profit warnings from Federated Department Stores and British telecom firm Marconi reminded investors how badly business is suffering here and abroad. Stocks close lower
on profit warningsStar-Bulletin news services
The warnings added to the market's dread over second-quarter earnings results, which companies begin issuing this month.
The Dow Jones industrial average closed down 91.25 at 10,479.86, according to preliminary calculations.
The broader market was also lower with the Nasdaq composite index falling 60.60 to 2,080.20, and the Standard & Poor's 500 index declining 15.20 to 1,219.25.
Declining issues outnumbered advancers on the New York Stock Exchange, with 1,700 falling, 1,399 rising and 201 unchanged. Volume came to 1.08 billion shares.
The Russell 2000 fell 4.09 to 492.74. The NYSE composite index fell 5.11 to 620.90 and the American Stock Exchange composite index rose 2.08 to 906.14.
The price of the 10-year Treasury note fell 6/32 to 97, while the yield rose 3 basis points to 5.401. The 30-year note dropped 7/32 to 94 26/32, and its yield rose 2 basis points to 5.740.
At the same time, the number of Americans signing up for initial jobless benefits rose last week, the government said today, while the number of people remaining on the unemployment rolls topped 3 million for the first time in 8 1/2 years. Initial claims for state unemployment insurance benefits, which give an early reading on the resilience of the labor market, rose to 399,000 in the week ended June 30 from a revised 392,000 in the prior week, the Labor Department said.
The increase was in line with Wall Street expectations.
The market was rattled by the size of the earnings warning from Federated, which said it will earn 40 to 50 cents a share for the second quarter, rather than the 70 cents to 75 cents a share a share Wall Street had expected. Federated, which last month announced it would by Hawaii retailer Liberty House, tumbled $2.37 to $38.01.
The retailing sector fell on Federated's news. Best Buy, which sells electronics, fell $1.40 to $66.78, while Home Depot, a Dow component, dropped $1.23 to $46.66.
"Retail sales are due to be reported next week, so this has set up a very high level of anxiety," Ackerman said. "With Federated numbers as they are, it appears shoppers are doing more browsing than buying, not just on Wall Street."
The technology and telecommunications sectors came under pressure from Marconi, which announced it was halving its earnings forecasts for 2001, and will cut 4,000 jobs. Marconi shares plunged $3.68 to $3.35, a 52 percent drop.
Other telecom shares fell, including equipment makers Alcatel, down $3.54 at $17.46, and JDS Uniphase, declining $1.06 to $11.61.