NEW YORK >> Wall Street slid to its first weekly loss in 2003 today, as tepid outlooks from Microsoft and IBM fed investor pessimism about the economy and sent stocks lower. Stocks fall on sluggish
Microsoft, IBM outlookBy Hope Yen
Associated PressThe tech-focused Nasdaq suffered its biggest loss in more than five weeks, while the three main gauges all fell to their lowest levels since Dec. 31, before investors started picking up stocks on hopes of better market prospects for the new year.
"The news today coming from two key bellwethers is taking away some of the recent enthusiasm," said Steven Goldman, chief market strategist at Weeden & Co.
Declining issues outnumbered advancers more than 2 to 1 on the New York Stock Exchange. Volume was light. The Dow Jones industrial average declined 111.13, or 1.3 percent, to close at 8,586.74, for a three-day loss of nearly 256 points.
The broader market also finished sharply lower. The Nasdaq composite index dropped 47.56, or 3.3 percent, to 1,376.19, the largest decline since Dec. 9, when it fell 55 points. The Standard & Poor's 500 index fell 12.82, or 1.4 percent, to 901.78. The Russell 2000 index fell 6.78, or 1.7 percent, to 388.10.
The price of the Treasury's 10-year note was up 1/2 point, while its yield fell to 4.01 percent from 4.08 percent late yesterday. Two-year Treasury notes were up 3/32 point and yielded 1.68 percent, down from 1.73 percent yesterday.
For the week, the three major gauges snapped a two-week winning streak, with the Dow losing 2.3 percent, the Nasdaq declining 4.9 percent, and the S&P 500 falling 2.8 percent.
IBM fell $4.75 to $81.30 after the computer company reported a drop in fourth-quarter profits that nonetheless beat analysts' estimates. However, it also issued a cautious outlook for 2003. Microsoft dropped $3.89 to $51.46 after the software maker said it would issue its first dividend and reported profits that slightly beat Wall Street's expectations.
"The trend so far is that most of the companies are beating expectations for the fourth quarter, but are talking rather pessimistically for the rest of the year," said Stephen Massocca, president of Pacific Growth Equities.
A trio of disappointing economic reports also weighed on stocks.
The University of Michigan's mid-month report on consumer sentiment for January fell to 83.7 from 86.7 in December, according to Dow Jones Newswires. The confidence reading fell short of economists' expectations of 86.4.
Meanwhile, the Federal Reserve reported production in the nation's industrial sector unexpectedly dipped by 0.2 percent in December, more than erasing a 0.1 percent gain the previous month. Analysts had forecast a 0.2 percent increase.
And the U.S. trade deficit grew to a record $40.1 billion in November. Analysts were predicting a smaller $36.4 billion imbalance.
Overseas, Japan's Nikkei stock average finished 0.9 percent higher. In Europe, France's CAC-40 fell 2.7 percent, Britain's FTSE 100 lost 1.6 percent and Germany's DAX index dropped 4.4 percent.
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