Posted at 11:15 a.m., Wednesday, August 15, 2001
Nasdaq tumbles to lowest point since April
Associated Press
NEW YORK — Doubtful that the economy will turn around anytime soon, investors pushed stocks lower today, knocking the Nasdaq composite index to its lowest level since April.
Blue chips fell on a report that industrial production in July slipped for the 10th-straight month, although the loss was smaller than expected. Meanwhile, tech stocks stumbled on a range of news in the semiconductor sector.
After being continuously disappointed by companies' second-quarter earnings results and hearing a litany of profit warnings for the current quarter, investors aren't ready to make major commitments on Wall Street, analysts said.
More than any news event, investors' lack of confidence in the market was responsible for today's decline and lighter-than-normal trading volume.
"There aren't a lot of players here. When the indexes fall it's because there is a lack of interest, not because everyone is dumping shares," said Larry Wachtel, market analyst at Prudential Securities.
The Dow Jones industrial average ended down 66.22 at 10,345.95, according to preliminary calculations.
The Nasdaq fell 45.64 to 1,918.89, its lowest close since April 16 when the index ended at 1,909.57 and its seventh loss in the past eight sessions.
The Standard & Poor's 500 index, Wall Street's broadest measure, declined 8.71 to 1,178.02.
Industrial production at the nation's factories, mines and utilities slipped just 0.1 percent in July, a smaller-than-expected decline and a possible indication that the manufacturing sector could be gaining strength. The news pushed the Dow up early before it headed lower later in the day.
"People are disbelieving of anything positive. Period. A year and a half ago, nobody would believe a negative thing, and now we're at a point when nobody believes anything positive," said Scott Bleier, chief investment strategist at Prime Charter Ltd.
Stocks of major industrial companies were mixed. Caterpillar climbed $1.37 to $55.23. But Houston-based energy giant Enron tumbled $2.68 to $40.25 after chief executive Jeffrey K. Skilling unexpectedly resigned yesterday.
Blue-chip trading was choppy with the Dow industrials weaving between slim gains and bigger losses for much of the session. American Express fell 73 cents to $38.66, while Coca-Cola gained $1.54 to $47.58.
The tech sector dropped on a string of news from the semiconductor industry and the fact that investors aren't convinced that better times are ahead for the battered stocks.
Among the tech losers was Motorola, which fell $1.01 to $17.40 on news that it will end production at its semiconductor plant in Mesa, Ariz., over the next two years, resulting in job losses for an undetermined number of the 1,200 employees.
Chip maker Advanced Micro Devices stumbled 75 cents to $14.75 after IBM announced it was switching to Intel chips for its computers. But Intel also fell, down 57 cents at $29.78, as the news heightened Wall Street's fears about an upcoming price war between AMD and Intel. IBM slipped $1.19 to $105.01.
There were few tech gainers — among them Applied Materials, up just 9 cents at $43.74, on better-than-expected earnings and positive assessments by Lehman Brothers and Merrill Lynch. The brokerages said business was improving for the chip equipment maker and recommended investors buy shares.
There were some blue-chip gainers, as well, including Federated Department Stores, which rose 93 cents to $38.33 after beating second-quarter earnings expectations by 2 cents a share. Federated also affirmed its estimates for the third quarter.
Despite the decline in the major indexes, advancing issues outnumbered decliners 16 to 15 on the New York Stock Exchange. Volume came to 1.05 billion shares, compared with the 960.22 million shares traded yesterday.
The Russell 2000 index, which measures the performance of smaller company stocks, fell 1.24 to 478.95.
Overseas markets were lower. Japan's Nikkei stock average finished the day down 1.4 percent. In Europe, Germany's DAX Index fell 1.2 percent, France's CAC-40 slipped 0.6 percent and Britain's FT-SE 100 lost 0.8 percent.
