NEW YORK >> Mixed earnings news from Intel jolted Wall Street today, sending stocks sharply lower as investors unloaded stocks on worries that corporate profits might not be so strong after all. Stocks tumble
on corporate newsBy Hope Yen
Associated PressAnalysts said the chip giant's plans to lower capital spending dampened investors' hopes of a resurgent economy in the coming months, while a bleak outlook from DuPont added to the pessimism.
"There is a recovery and companies are hitting the numbers, but maybe the Street was over-optimistic as to capital spending for the tech sector," said Charles Pradilla, chief investment strategist at SG Cowen Securities. "It isn't coming on with the vigor people need to give satisfactory profits."
Declining issues outnumbered advancers about 8 to 5 on the New York Stock Exchange. Volume was light.
The Dow Jones industrial average declined 119.44, or 1.4 percent, to close at 8,723.18, having gained 56 points yesterday.
The broader market also fell. The Nasdaq composite index dropped 22.19, or 1.5 percent, to 1,438.80. The Standard & Poor's 500 index fell 13.44, or 1.4 percent, to 918.22. The Russell 2000 index fell 2.92, or 0.7 percent, to 395.53.
The price of the Treasury's 10-year note was up 1/16 point, while its yield fell to 4.07 percent from 4.08 percent late yesterday. Two-year Treasury notes were up 1/32 point and yielded 1.73 percent, down from 1.74 percent yesterday.
Intel, a Dow component, dropped 44 cents to $17.35 after it reported fourth-quarter earnings that beat analysts' expectations; however, the chip maker said capital spending in 2003 will range between $3.5 billion and $3.9 billion, down from $4.7 billion in 2002.
The news hurt other tech stocks, including Applied Materials, which fell 91 cents to $14.45, and KLA-Tencor, which dropped $1.20 to $38.45.
Meanwhile, DuPont, another Dow component, lost $1.50 to $42.50 after the company lowered its fourth-quarter earnings forecast, citing weaker-than-expected operating results in the second half.
The news "shows the overwhelming caution that exists in corporate America," said Pradilla.
Bank of America fell $1.03 to $71.45 despite reporting quarterly earnings that beat analysts' estimates.
Gainers included Continental Airlines, which rose 20 cents to $9.10 after the airline reported a fourth-quarter loss narrower than Wall Street's estimates.
Investors largely ignored a Labor Department report that wholesale prices were flat in December. The reading, which came after prices fell by 0.4 percent in November, showed that inflation is not a danger. Analysts were expecting prices to go up by 0.3 percent.
Japan's Nikkei stock average finished 0.7 percent higher. In Europe, France's CAC-40 fell 1.2 percent, Britain's FTSE 100 dropped 1.5 percent and Germany's DAX index lost 1.6 percent.
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