Posted on: Friday, January 21, 2005
Market's 'correction' eroding gains of '04
By Michael J. Martinez
Associated Press
NEW YORK — Nervous investors overlooked strong earnings from Citigroup Inc. and a possible merger of Federated Department Stores Inc. and May Department Stores Co., pushing stocks substantially lower yesterday on disappointing earnings from the technology sector.
Cell-phone maker Qualcomm Inc. likewise issued a disappointing profit forecast.
In the face of the upcoming Iraqi elections and the OPEC oil cartel's meeting on Jan. 30, as well as concern about inflation, the market will likely continue to give ground should earnings disappoint, analysts said.
As for the economy, the Conference Board's Index of Leading Economic Indicators went up 0.2 percent in December, with the increase in November revised to 0.3 percent.
Stocks are "in a correction right now from the rise we saw since mid-October," said Rod Smyth, chief investment strategist at Wachovia Securities, who found it "perfectly natural for markets to behave this way."
That correction has nearly wiped out all the Nasdaq's gains from the fourth-quarter rally, while severely denting the advances made by the Dow and S&P 500.
Declining issues outnumbered advancers by about 5-to-2 on the Big Board, where preliminary consolidated volume came to 2.11 billion shares compared with 1.91 billion on Wednesday.
Investors were troubled as eBay Inc. missed its earnings target for the fourth quarter and said its outlook for this quarter was lower than expected. Three brokerage firms lowered their ratings on the online auctioneer.
