Posted at 12:05 p.m., Tuesday, July 3, 2001
Dow down amid more warnings
Associated Press
NEW YORK — Wall Street stalled today, held back by a fresh round of earnings warnings and decreased trading activity in advance of the Fourth of July holiday.
The Dow Jones industrial average closed down 22.41 at 10,571.31, according to preliminary calculations, in an abbreviated session that ended at 1 p.m. EDT.
U.S. markets will be closed tomorrow for the holiday.
Broader stock indicators were virtually unchanged. The Nasdaq composite index slipped 10.51 to 2,138.21, while the Standard & Poor's 500 index lost 2.23 to 1,234.48.
"We've had a little bit of earnings news, but basically this is a pretty quiet market because of the holiday," said James Meyer, director of research at Janney Montgomery Scott. "It'll probably be more productive today on the golf course than on the trading floor."
DuPont fell 92 cents to $47.20 after sharply curtailing its earnings estimate for the second quarter, blaming a global economic slowdown and a strong dollar.
Earnings worries also hurt technology stocks.
Axsys Technologies fell 17 cents to $10.74 after reducing its second-quarter outlook and slashing 9 percent of its work force because of soft demand for products.
In the software sector, BroadVision dropped 89 cents to $4.04 after lowering its second-quarter revenue forecast and expanding loss estimates.
The warnings are the latest in what has been an unrelenting string of bad news ahead of second-quarter earnings reports, which start to appear this month.
Although Wall Street had been expecting the second quarter to be weak, many investors have been caught off guard by the level of weakness and most companies' inability to predict when the environment will improve.
That murkiness has thwarted the market's efforts to rally. Since investors have no confidence, they've had little incentive to commit their money to the market fully.
Even a new Commerce Department report today showing U.S. factory orders rebounding in May to their best performance in nearly a year — chiefly on stronger demand for cars and semiconductors — failed to inspire investors.
"The whole key here is earnings and when earnings will start to turn," said Robert Harrington, co-head of listed block trading at UBS Warburg. "It's just not visible quite yet when that will happen, but people are hopeful it will.
"The Federal Reserve has cut interest rates six times this year. People are just waiting to see when things will turn around," he said.
Also today, European regulators, as expected, blocked General Electric's $41 billion purchase of Honeywell International, citing competitive concerns. GE slipped 80 cents at $49.40, while Honeywell rose 99 cents to $35.10 on a report the board of directors was going to replace chief executive and chairman Michael Bonsignore.
Advancing issues led decliners 4 to 3 on the New York Stock Exchange in quiet trading. Volume finished the session at 621.19 million shares, compared with 1.11 billion shares yesterday, when trading ended at 4 p.m. EDT.
