Stocks finished lower Wednesday, as disappointing earnings forecasts hammered blue chips once again. There was some buying among big tech names which helped support the Nasdaq, but it wasn't enough to keep the index from edging lower at the close.
The Dow Jones industrial average was down 124.20 points, or 1.47%, to 8,318.73. The broader Standard & Poor's 500-stock index lost 9.24 points, or 1.04%, to 878.38. And the tech-laden Nasdaq composite index fell 4.75 points, or 0.35%, to 1,359.50.
The market has fallen five straight sessions now, erasing just about all of the gains from the early January rally. Besides the uncertain outlook for corporate profits, worries about war with Iraq continue to dampen the mood on Wall Street.
Earnings reports are taking center stage this week as many big-name companies release results. After the market close today, chipmaker Texas Instruments (TXN), business software designer Computer Associates (CA), and wireless chip producer Qualcomm (Q) are scheduled to release profits.
The long list of companies set to report results Thursday includes BellSouth (BLS), Amgen (AMGN), EMC (EMC), Amazon.com (AMZN), Eli Lilly (LLY), First Data (FDC), Nokia (NOK), and Starbucks (SBUX).
On Wednesday, the Dow was led lower by Eastman Kodak (EK), which reported lower-than-expected earnings per share for the fourth quarter. The company said it sees its consumer film business down 4% to 6% in 2003, following the weaker-than-expected results in the fourth quarter, and will cut as many as 2,200 more jobs. Shares of the photo products maker fell nearly 12% Wednesday.
Among financial outfits, losses widened at JP Morgan Chase (JPM). Merrill Lynch (MER) posted a rise in fourth-quarter earnings, but said it thinks it may be difficult to maintain 2002 revenue levels this year.
In the defense arena, General Dynamics (GD) shares skidded 12% after the company reported a drop in fourth-quarter profits, hurt by its commercial aircraft and Gulfstream jet division.
Energy services provider Schlumberger (SLB) posted fourth-quarter EPS from continuing operations of 25 cents, vs. 46 cents a year ago, on 7% lower operating revenue. The company said it sees lackluster oilfield activity continuing in 2003. The shares were down on Wednesday.
After the market close Tuesday, Motorola (MOT) reported earnings that beat expectations, but the company lowered the bar for its upcoming first quarter. The shares fell on Wednesday.
Still, there was some positive earnings news Wednesday from Pfizer (PFE). The pharmaceutical maker said it earned 48 cents a share from operations, a penny above analysts' forecast, on a 14% revenue rise.
Telecom equipment supplier Lucent Technologies (LU), which posted a loss of 15 cents a share (excluding items) in its fiscal first quarter, beating the consensus estimate for a loss of 21 cents a share. The company said it still expects to return to profitability in this fiscal year. The shares rallied on the news.
Treasuries ended higher as investors sought safety amid war jitters and poor earnings outlooks. The U.S. Treasury reported a $4.4 billion surplus for December, which is a sharp deterioration from the $26.6 billion surplus seen in the same month last year and reflects the government's ongoing problem of increased spending alongside decreased receipts, says economic research outfit MMS International.
Thursday's economic releases include weekly jobless claims and the index of U.S. leading economic indicators.
European stock markets ended lower amid growing worries that the U.S. and United Kingdom will attack Iraq in the near future despite objections from France and Germany. Many investors are worried about the effect of war on economies.
London's FTSE index was down 58.70 points, or 1.57%, to 3,678. In Paris, the CAC-40 index lost 61 points, or 2%, to 2,931. In Frankfurt, the DAX index fell 67.32 points, or 2.35%, to 2,803.25.
In Asia, stocks finished with losses. Japan's Nikkei 225 index fell 97.54 points, or 1.12%, to close at 8,611.04 due to Wall Street's overnight fall and profit-taking from the previous day's recovery in tech and auto exporters. Meanwhile, Hong Kong's benchmark Hang Seng index lost 8.18 points. or 0.09%, to close at 9,560.29.