Posted at 12:15 p.m., Monday, January 14, 2002
Investor worries send market lower
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By Amy Baldwin
Associated Press
NEW YORK — Investors succumbed to worries about earnings and sold stocks sharply lower today while they awaited fourth-quarter results that will begin in earnest this week. The selloff resulted in the Dow industrials' first six-session losing streak since late 2000.
"Until there is a better fix on the state of earnings reports, it looks like we will face a cautious investment constituency," said Alan Ackerman, executive vice president of Fahnestock & Co.
Analysts expect trading to be choppy for the remainder of January as slumping profits remind investors of the weak economy.
The Dow Jones industrial average closed down 96.11, or nearly 1 percent, at 9,891.42, according to preliminary calculations. The Dow has lost 368.32, or 3.6 percent in six straight losing sessions, a streak not seen since Oct. 12, 2000.
But analysts weren't concerned, saying the losses are natural following the market's huge rebound from the lows that followed the Sept. 11 terror attacks. The Dow fell for five straight sessions after the attacks.
The broader market also fell. The Nasdaq composite index fell 31.72, or 1.6 percent, to 1,990.74 and the Standard & Poor's 500 index declined 7.19, or 0.6 percent, to 1,138.41.
Analysts said today's weakness was also prompted by comments Friday from Federal Reserve Chairman Alan Greenspan, who said the economy is stabilizing but still faces significant risks.
"That throws cold water on bullish fighters, and investors are giving second thoughts to the imminence of a recovery," said A.C. Moore, chief investment strategist for Dunvegan Associates in Santa Barbara, Calif.
The market's losses were widespread. IBM fell $2.26 to $118.05, and Juniper Networks declined $1.16 to $18.10. J.P. Morgan Chase fell $1.03 to $37.31, and Yahoo! decreased $1.15 to $19.01. All are to release earnings later in the week.
"We realized we still have to wait on signs that the economy is improving," said Bryan Piskorowski, market commentator for Prudential Securities.
Retailers were lower ahead of the Commerce Department's report on December sales due out tomorrow. Target stumbled 84 cents to $39.46.
Kmart fell 14 percent, down 46 cents at $2.84, after its credit rating was downgraded further into junk status late Friday by Moody's Investors Service. Kmart's stock plummeted more than 35 percent last week after it reported weak holiday sales and talked of cash flow problems that could require more financing.
Wall Street boasted a few winners, however. Fannie Mae rose 95 cents to $79 after posting fourth-quarter earnings of $1.40 a share, a penny higher than expectations.
Micron Technology gained 47 cents to $35.60 after Lehman Brothers raised its rating on the stock to "buy" from "market perform."
Analysts advised against getting too concerned over the market's recently slippage for two main reasons: the market's big fourth-quarter rally, and Wall Street's seasonal patterns.
"I don't recall a market ever bouncing from the sell-off like September with such vigor. We seem to be working off some of that bounceback," said Fahnestock's Ackerman.
The Dow is 20 percent above its Sept. 21 low of 8,235.81. The Nasdaq is nearly 40 percent above its low; the S&P 500, up almost 18 percent.
Declining issues outnumbered advancers 3 to 2 on the New York Stock Exchange where volume was moderate.
The Russell 2000 index, which tracks the performance of smaller company stocks, fell 6.93, or 1.4 percent, to 483.01.
