Stocks Down on Negative Tech Outlook
Led by technology shares, stocks ended lower on Monday after bellwether semiconductor equipment maker Applied Materials Inc. (AMAT ) said it doesn't see the sector rebounding until 2002 -- much later than some market observers had been hoping. Shares of Applied Materials lost more than 9%.
The bad news comes as investors try to make sense of a flood of earnings reports from a variety of sectors. Among Monday's stocks in the news, Citigroup Inc. (C ) said its operating profits rose 13% in the second quarter, boosted by growth at its international consumer business. Shares of Citigroup ended relatively flat.
And in other corporate news, electronic manufacturing firms SCI Systems (SCI ) and Sanmina Corp. (SANM ) agreed to merge in a deal valued at total of about $6 billion, including debt assumption.
Arthur Bonnel, manager of the U.S. Global Accolade Funds: Bonnel Growth (ACBGX ) told Standard & Poor's that in addition to earnings results, institutional traders are awaiting the June Consumer Price Index report, due Wednesday, to determine what the Federal Reserve might do about interest rates.
The Dow Jones Industrial Average ended down 66.94 points, or 0.64%, to 10,472.12. The tech-heavy Nasdaq Composite lost 55.66 points, or 2.67%, to 2,029.13. The broader S&P 500 Index was lower by 13.23 points, or 1.09%, to 1,202.45.
U.S. Treasuries finished higher, amid weakness in equities. In economic news, the government reported U.S. business inventories held steady in May, while sales rose for the first time since December. The Commerce Department said inventory levels remained unchanged in May at $1,197.1 billion as sales grew 1.1%, the biggest increase since a 1.9% rise in March of 2000 and the first rise since sales rose by 0.3% in December.
European markets ended lower. In London, the Financial Times-Stock Exchange 100 index was down 19.90 points, or 0.36%, to 5,517.10. In Germany, the DAX Index shed 85.87 points, or 1.45%, to 5,842.14. In France, the CAC 40 lost 2.48 points, or 0.05%, to 5,022.76.
In Asia, markets finished mixed on some profit taking. The Nikkei lost 11.78 points, or 0.10%, to 12,343.37. In Hong Kong, the market gained 11.74 points, or 0.09%, to 12,624.53.
By Heesun Wee in New York