- NEW YORK (Bloomberg) -- U.S.
stocks tumbled, driving the Dow Jones Industrial Average to its lowest
in almost five years and ending a sixth straight losing week.
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- Earnings shortfalls at companies including Boeing Co.,
EMC Corp., Northern Trust Corp. and Schering-Plough Corp. spurred the plunge.
A California court order that Philip Morris Cos. must pay $28 billion in
damages to a smoker who contracted lung cancer helped extend declines.
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- ``You can't dance around fast enough to avoid the blows,''
said Owen Burman, a portfolio manager at Riggs Investment Management Corp.,
which oversees $2 billion in Washington. ``I don't have any confidence
to buy.''
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- The earnings reports heightened investor concern over
slowing profit growth and drove down the Dow by 188.79 points, or 2.5 percent,
to 7528.40. That's the lowest close since Nov. 13, 1997.
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- The Standard & Poor's 500 Index dropped 18.37, or
2.2 percent to 800.58, 2 points above the five-year low reached in July.
The Nasdaq Composite Index reached its lowest since Sept. 6, 1996, declining
25.66, or 2.2 percent, to 1139.90.
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- For the week, the S&P 500 dropped 3.2 percent. It
last fell six weeks in a row in February and March 2001. The Dow lost 2.3
percent and the Nasdaq 4.9 percent amid concern an eight-day West Coast
port shutdown will slow the economy and as the Bush administration works
to get congressional authorization for the use of force against Iraq.
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- Unemployment Rate Falls
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- Stocks rose in early trading after a government report
showed the unemployment rate fell in September to 5.6 percent from 5.7
percent last month. Economists expected 5.9 percent, according to a survey
by Bloomberg News. Even so, payrolls fell by 43,000.
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- Investors ``quickly refocused on poor earnings numbers,''
said Jeff Swensen, a trader at John Hancock Advisors, which manages $29
billion in Boston.
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- More than three U.S. companies have lowered third-quarter
profit estimates for every one that has raised them, according to Bloomberg
data. Analysts expect 5.9 percent profit growth for the S&P 500 in
the third quarter, down from 17 percent as of July 1, according to Thomson
First Call.
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- Today, almost three stocks fell for every one that rose
on the New York Stock Exchange. Some 1.82 billion shares traded on the
Big Board, 20 percent more than the three-month daily average.
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- Boeing fell $2.30 to $32.01. The planemaker had $158
million in costs to write down the value of aircraft leased and financed
to money-losing air carriers such as United Airlines, trimming 20 cents
a share from third-quarter profits. Analysts had forecast profit of 66
cents.
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- EMC Slides
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- EMC slid $1.18 to $3.83. The world's largest maker of
data- storage systems said it lost 2 cents a share in the third quarter
before certain costs. Analysts had expected a 1-cent loss. Chief Executive
Joseph Tucci yesterday said the company probably will fall short of second-half
profit goals amid a ``brutal'' spending climate.
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- Smaller rival Network Appliance Inc. dropped 38 cents
to $6.27 and QLogic Corp., which makes components for data storage systems,
fell $3.71 to $20.89.
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- Northern Trust Corp. fell $1.93 to $31.81 and Hibernia
Corp. declined $1.02 to $17.75 after the banks said they expect lower third-quarter
earnings because of bad loans and losses on investments.
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- Northern Trust said it will earn 43 cents a share in
the quarter. Analysts had forecast 54 cents. Hibernia said it expects to
earn 40 cents a share, lagging analysts' estimates by 3 cents. Bank shares
plunged this week after Comerica Inc. and Bank of New York Co. cut profit
forecasts, citing rising loan losses.
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- Schering-Plough Falls
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- Schering-Plough fell 34 cents to $17.30. The maker of
the top- selling allergy remedy Claritin said wholesalers are trimming
orders for the drug in anticipation of cheaper generic versions. The company
earned 28 cents to 29 cents a share in the third quarter, lagging analysts'
estimates by at least 6 cents.
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- Richard Kogan, Schering-Plough's chief executive officer,
told a meeting of analysts yesterday that profit next year would be disappointing.
``He said 2003 results would be terrible, indicating that analysts were
too high with their estimates,'' said Raymond James & Associates analyst
Michael Krensavage.
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- Pfizer Inc. lost $1.09 to $28.55, Johnson & Johnson
shed $1.03 to $56.95 and Merck & Co. dropped $2.03 to $44.26.
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- Philip Morris fell $2.91 to $36.59. The jury awarded
$850,000 in compensation for illness and $28 billion in punitive damages
to a woman who claimed the company misrepresented the dangers of smoking.
The award is about one-third the company's market value.
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- Laboratory Corp. of America Holdings slumped $11.50 to
$21.68. The laboratory operator said in a filing with the Securities and
Exchange Commission that it expects to report third- quarter profit that
is about 10 percent lower than the 49 cents a share analysts forecast.
Rival Quest Diagnostics Inc. lost $6.94 to $55.48. Dianon Systems Inc.
fell $3.79 to $42.05.
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- Alcoa Drops
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- Alcoa Inc. fell 99 cents to $19.11. The world's biggest
aluminum producer reported third-quarter profits that met analysts' lowered
forecasts of 26 cents a share, excluding certain items. A month ago analysts
projected a profit of 31 cents.
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- TXU Corp. tumbled $5.86 to $27.04. The utility owner,
which entered the U.K. market in 1998, halted European projects and said
third-quarter profit fell more than a quarter, above forecasts, amid tumbling
U.K. electricity prices.
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- DuPont Photomasks Inc. fell $3.81 to $18.35. The maker
of equipment to make computer chips said it lost 30 cents to 32 cents a
share in the fiscal first quarter. Analysts had forecast a 7- cent loss.
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- McDermott International Inc. plunged $2.29 to $3.80.
The builder of offshore oil-drilling platforms said it expects to report
a third-quarter loss of 71 cents a share. Analysts had projected a profit
of 2 cents.
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- Clear Channel Communications Inc. fell $1.12, or 3.2
percent, to $33.73, paring a loss of as much as 7 percent. Company spokesman
Randy Palmer denied speculation the biggest U.S. radio broadcaster would
lower previously reported earnings.
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- Marsh & McLennan Cos. fell $3.13 to $35.53. Credit
Suisse First Boston analyst Charles Gates reduced profit estimates for
the biggest insurance broker because of lower-than-expected earnings at
its Putnam unit, the fourth-largest U.S. mutual-fund company. Gates now
expects 2002 profit of $2.47 a share instead of $2.50, and 2003 profit
of $2.82, down from $2.88.
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- Foundry Networks Rises
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- Foundry Networks Inc. rose 49 cents to $6.02. The maker
of computer-networking equipment said it expects to report a third- quarter
profit of 4 cents to 6 cents a share. The average estimate of analysts
polled by Thomson First Call is 4 cents.
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- The Russell 2000 Index of smaller stocks fell 8.87, or
2.5 percent, to 347.98. The Wilshire 5000 Total Market Index, the broadest
measure of U.S. shares, declined 174.86, or 2.3 percent, to 7598.61. Based
on changes in the Wilshire, the market value of U.S. stocks dropped by
$209.83 billion.
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- http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%
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