NEW YORK >> Profit warnings from Disney and Hewlett-Packard pressured Wall Street today, sending stocks lower in choppy trading as investors grew jittery over the strength of corporate America's recovery. Stocks tumble on
Disney, HP warningsBy Hope Yen
Associated PressThe Dow Jones industrials fell as much as 89 points before recovering most of that drop. Analysts said the late-day gains were heartening since many were expecting bigger declines following the Dow's eight-week winning streak.
"We had two or three jolts here that could have resulted in more profit-taking than we had," said Bill Barker, investment strategy consultant at RBC Dain Rauscher. "It's obvious that market sentiment has changed in the last few months, and investors are more positive about their outlook for 2003."
Declining issues narrowly outnumbered advancers on the New York Stock Exchange. Volume was light.
The Dow slipped 5.08, or 0.1 percent, to close at 8,737.85, having fallen 188 points in the previous three days.
The broader market also finished lower. The Nasdaq composite index fell 18.63, or 1.3 percent, to 1,430.33. The Standard & Poor's 500 index declined 3.18, or 0.4 percent, to 917.57. The Russell 2000 index fell 3.30, or 0.8 percent, to 397.53.
The price of the Treasury's 10-year note closed up 11/32 point, while its yield fell to 4.16 percent from 4.21 percent yesterday. Two-year Treasury notes were up 3/32 point and yielded 1.99 percent, down from 2.05 percent yesterday.
Disney fell 86 cents to $17.68 after the entertainment company lowered its fourth-quarter earnings estimate, citing weak ticket sales for its latest animated film, "Treasure Planet."
Hewlett-Packard dropped 86 cents to $18.37 after the computer maker said 2003 revenue should rise 2 percent to 4 percent from 2000, lower than its previous forecast.
Analysts say that while investors have been more upbeat about the economy, leading to eight weeks of blue-chip gains, the market is seeing some declines as investors also worry about a war with Iraq and the strength of corporate profits.
"The advance we've seen in stocks over this brief period has probably outpaced the improvement in underlying fundamentals of the companies," said Charles G. Crane, strategist for Victory SBSF Capital Management.
Investors largely shrugged off two encouraging economic reports today. The Labor Department reported productivity grew at an annual rate of 5.1 percent in the third quarter. And the Commerce Department said orders to U.S. factories rose 1.5 percent in October.
Federated Department Stores fell 73 cents to $31.25 after the retailer said November sales at stores open at least a year fell 7.4 percent.
Overseas, Japan's Nikkei stock average finished 2.2 percent lower. In Europe, France's CAC-40 fell 0.7 percent, while Britain's FTSE 100 dropped 0.7 percent and Germany's DAX rose 1.2 percent.
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