NEW YORK >> Wall Street's pessimism about earnings deepened today, sending the Dow Jones industrials down more than 200 points following more bad news from technology bellwethers EMC and Advanced Micro Devices.
Earnings sink stocks
By Lisa Singhania
The latest earnings warnings, combined with news of an increase in the June unemployment rate, exacerbated fears that second-quarter results will be even worse than expected -- and that a business turnaround before 2002 will be impossible.
"A lot of people had bought the idea that the worst was behind us. Obviously that's not the case," said Richard Dickson, a technical analyst at Hilliard Lyons. "The earnings warnings, particularly in tech, are continuing and that's spreading to the rest of the market."
The Dow fell 227.18 to 10,252.68, according to preliminary calculations, extending its drop of the previous two sessions. The blue chips have now suffered seven straight weekly declines.
Broader stock indicators also tumbled. The Nasdaq composite index was off 75.95 at 2,004.16 after three consecutive daily declines, while the Standard & Poor's 500 index lost 28.65 to 1,190.59, its third straight drop.
Declining issues led advancer on the New York Stock Exchange, with 2,082 falling, 1,021 rising and 186 unchanged. Volume was 1.2 billion shares.
The Russell 2000 index fell 9.47 to 483.26. The NYSE composite index fell 11.57 to 609.33 and the American Stock Exchange composite index dropped 8.97 to 897.17.
The price of the Treasury's 10-year note rose 6/32 to 97 9/32, while its yield fell 3 basis points to 5.363. The price of the 30-year note rose 4/32 to 94 31/32, and its yield rose 1 basis point to 5.729.
"The question is still when is the economy going to turn," said Todd Clark, co-head of trading at WR Hambrecht. "With the EMC and Advanced Micro Device misses being so big and really blindsiding the Street, it's caused people to say, 'I'm pulling bids and I'm not going to be buying right now.' "
EMC tumbled $8.43 to $21.60, a 28 percent loss, after the data storage company said a slowdown in tech spending will put its second-quarter earnings far below Wall Street expectations.
A similar earnings prediction from Advanced Micro Devices sent the chip maker down 27 percent, falling $7.84 to $20.80.
The degree of the reductions made investors think twice about other technology issues, including IBM, which fell $5.60 to $106.50, and Intel, which dropped $1.41 to $28.43.
Non-technology stocks weren't immune from investors' frustration. America West Holdings, the parent carrier for America West Airlines, fell 34 cents to $9.32 on news it expects the carrier to post a second-quarter net loss because of the weak U.S. economy and high fuel prices.
But retailer Federated managed a small gain, rising 23 cents to $38.24, despite a profit warning blamed on weak sales.
Overseas markets were also weak. Japan's Nikkei stock average fell 2.4 percent. In Europe, Germany's DAX index dropped 2.3 percent, Britain's FT-SE 100 lost 1.3 percent, and France's CAC-40 slipped 2.4 percent.