Rense.com
By Chelsea Emery
10-16-2
| NEW YORK (Reuters) - Stocks
backed away from a four-session up streak on Wednesday after surprisingly
weak earnings from technology bellwether Intel Corp. INTC.O fanned corporate
profit jitters at the height of earnings season. Intel, the world's No. 1 maker of computer chips, tumbled 17 percent as its disappointing sales outlook slammed investor sentiment, just as stocks had taken a turn for the better. Last week, stocks scored their first gain in six weeks and on Tuesday the market racked up its first four-day rise since August. The Dow had scrambled up about 13 percent since last Wednesday. "They serve as a proxy for the whole semiconductor sector," said James Luke, director of growth equity management at BB&T Asset Management, which oversees $10 billion. In addition, he said, "after this kind of run, the market needed a good excuse to back off. We had a huge move in a short period of time with no real change." Profit taking after the rally was expected, but a fierce debate has emerged as to whether stocks have bottomed after the Standard & Poor's 500 index hit five-year lows this month. Worries linger over the U.S. economy, a possible war on Iraq and the odds of more attacks like the bombing in Bali over the weekend, but some market watchers think the bad news has already been pounded into the market. "There's still plenty of upside potential," said Ken Tower, a technician at Charles Schwab SCH.N unit CyberTrader Inc. in a note to clients, after he saw the recent rally had taken stocks shooting through technical resistance levels. The technology-loaded Nasdaq Composite Index .IXIC lost 49 points, or 3.84 percent, to 1,233. The blue-chip Dow Jones industrial average .DJI sank 215 points, or 2.61 percent, to 8,040. The broader Standard & Poor's 500 Index .SPX dropped 22 points, or 2.53 percent, to 858. Losers beat out advancers by a ratio of more than 3 to 1 on the New York Stock Exchange and 5 to 3 on the Nasdaq. More than 975 million shares changed hands on the Big Board and more than 1.02 billion on Nasdaq in active trading. Intel fell $2.88 to $13.64, ranking as the most-active share on the Nasdaq and the largest percentage loser on the Dow. Intel posted earnings per share below Wall Street's estimates, forecast fourth-quarter revenues below expectations and said there's no sign yet of a recovery in the personal computer industry. Novellus Systems Inc. NVLS.O fell $1.84, or more than 7 percent, to $24.29. The chip equipment maker said "anemic demand" depressed revenue in the third quarter amid a slumping semiconductor industry that has shown few signs of recovery. The Philadelphia Stock Exchange semiconductor index .SOXX tanked 8.84 percent. Advanced Micro Devices Inc. AMD.N , a rival of Intel, dropped 50 cents, or nearly 12 percent, to $3.70 ahead of its quarterly earnings report after the bell. Chip equipment maker Applied Materials Inc. AMAT.O fell $1, or more than 7 percent, to $12.05. International Business Machines Corp. IBM.N , slated to post results after the close, lost $3.53, or 5 percent, to $64.95. Computer maker Apple Computer Inc. AAPL.O , also due to release results after the bell, fell 54 cents, or 3.5 percent, to $14.63. Web gear giant Cisco Systems Inc. CSCO.O surrendered $1, or more than 9 percent, to $9.99. Motorola Inc. MOT.N sank $2.21, or 23 percent, to $7.89 and topped the Big Board's most active list. The wireless technology giant cut its outlook for the fourth quarter and 2003 year, blaming slowing demand in several of its businesses, including broadband, infrastructure and semiconductors. |
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