NEW YORK >> Discouraging earnings news from Alcoa and Gateway jarred Wall Street today, giving blue chip stocks their biggest decline in a month as investors unloaded shares on concerns about the corporate outlook. Stocks fall on
corporate newsBy Hope Yen
Associated PressAnalysts said many investors also were looking to cash in gains following the recent three-day rally, which lifted the Dow Jones industrial average nearly 432 points, its best ever performance for the first three trading days of a new year.
"Gateway and Alcoa's earnings were disappointing, so that's leaning on the market," said Alfred E. Goldman, chief market strategist at A.G. Edwards & Sons Inc. "But mostly, you're getting some normal profit-taking."
Declining issues outnumbered advancers 9 to 5 on the New York Stock Exchange. Volume was moderate. The Dow fell 145.28, or 1.7 percent, to close at 8,595.31. It was blue chips' biggest decline since Dec. 9, when the Dow fell 172 points.
The broader market also finished lower. The Nasdaq composite index dropped 30.48, or 2.1 percent, to 1,401.09. The Standard & Poor's 500 index declined 12.99, or 1.4 percent, to 909.94. The Russell 2000 index fell 4.88, or 1.2 percent, to 389.07.
The price of the Treasury's 10-year note was up 5/32 point, while its yield fell to 3.98 percent from 4.02 percent late yesterday. Two-year Treasury notes were up 1/16 point and yielded 1.70 percent, down from 1.76 percent yesterday.
Alcoa slid $2.53, or 10.4 percent, to $21.85 after the aluminum maker reported a fourth-quarter loss wider than analysts' estimates.
Gateway fell 21 cents to $2.96 after the computer maker warned fourth-quarter losses would be larger than expected, citing disappointing holiday sales.
Analysts say today's trading showed that investors remain wary about the economic outlook, particularly as they wait for companies to report profits in the coming weeks. But they say investors are still looking for better prospects for 2003, particularly after President Bush proposed yesterday to slash taxes, including the elimination of the federal tax investors pay on stock dividends.
Bank of New York dropped $1.04 to $25.50 after saying it was buying Credit Suisse First Boston's Pershing stock-clearing unit for $2 billion in cash and other considerations.
Telecommunications shares also took a hit. BellSouth fell $1.27 to $27.65 and Verizon dropped $2.32 to $40.91 after UBS Warburg downgraded shares of the two companies.
Gainers included Marvel Enterprises, which rose 65 cents to $10.80, after the comic book publisher raised its 2002 performance target.
Japan's Nikkei stock average finished 1.6 percent lower. France's CAC-40 fell 2.1 percent, Britain's FTSE 100 dropped 0.8 percent and Germany's DAX index fell 3.9 percent.
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