Posted at 10:51 a.m., Friday, October 4, 2002
Stock market skittish amid mixed reports
By Lisa Singhania
Analysts said investors remained jittery after several weeks of earnings warnings. A labor dispute that shut down 29 West Coast ports and threatened to sap billions of dollars from the economy added to the gloom, as did continuing tensions with Iraq.
"The market just keeps grabbing onto bad news and locking in on that," said Scott Wren, equity strategist for A.G. Edwards & Sons. "Between Iraq and the West Coast port situation, those are two obvious, huge extraneous events that are also weighing on the market."
The Dow dropped 188.79, or 2.4 percent, to close at 7,528.40, the lowest finish since Nov. 13, 1997, when it closed at 7,487.80. The average has closed with triple-digit gains or losses in nine of the last 10 sessions.
Broader stock indicators also retreated. The Standard & Poor's 500 index declined 18.36, or 2.2 percent, to 800.59, and the Nasdaq composite index lost 25.64, or 2.2 percent, to 1,139.92.
The finish gave the three main gauges their sixth straight losing week. For the week, the Dow lost 2.2 percent, the Nasdaq declined 4.9 percent, and the S&P fell 3.3 percent.
Analysts say that with the bear market approaching the three-year mark, many investors have lost their appetite for stocks and are avoiding buying for fear of seeing their already battered portfolios lose more value.
"Probably the biggest factor in the market not doing well right now is that companies are just not saying they're making money. Every time you turn around, there's another company talking about how the quarter's not going well," said Stephen Massocca, president of Pacific Growth Equities.
Tensions with Iraq have further intensified the volatility, with uninspiring economic data giving investors yet another reason to avoid stocks.
Indeed, the latest figures released today were mixed. The Labor Department reported that the nation's unemployment rate fell to 5.6 percent in September, a slight improvement from the 5.7 percent level of August.
At the same time, a separate government survey of businesses showed employers cut 43,000 jobs last month the first such reduction since April.
Although the unemployment rate was lower than expected, the report still disappointed Wall Street because it suggested companies are feeling less confident that business is improving.
A new group of earnings warnings added to the malaise.
EMC lost $1.19 to $3.82 after the data storage company said more job cuts were on the way because of the slump in technology spending. The company also said it expects a loss of 2 cents per share for the third quarter a wider decline than expected.
The selling spread to other tech stocks too, including rival IBM, which fell $3.40 to $56.60.
Schering-Plough also fell, down 34 cents to $17.30, after the drugmaker reduced its outlook for the third quarter and rest of the year, citing expected losses when its prescription drug Claritin becomes available over the counter.
Boeing slipped $2.31 to $32 after the aircraft manufacturer said that the aviation industry's slump is affecting its business.
Philip Morris slid $2.91 to $36.59 on news that a California jury had awarded $28 billion in punitive damages to a 64-year-old woman who started smoking when she was 17 and was diagnosed last year with lung cancer that has since spread to her liver.
Declining issues led advancers 3 to 1 on the New York Stock Exchange. Volume was heavy.
The Russell 2000 index fell 8.87, or 2.5 percent, to 347.98.
Overseas, Japan's Nikkei stock average rose 1.0 percent. In Europe, Germany's DAX index lost 3.5 percent, Britain's FTSE 100 was down 1.7 percent, and France's CAC-40 fell 3.3 percent.