- NEW YORK (Reuters)
- Blue-chip stocks dropped on Friday, wrapping up their worst week since
the aftermath of the Sept. 11 attacks, as a drop in U.S. consumer sentiment,
a sour call on Home Depot Inc. HD.N and fears over financial shenanigans
rattled investors.
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- "The bias is still on the sell side," said
James Volk, director of institutional trading at D.A. Davidson and Co.
"But at some point the market will hit bottom, so let's hope that
we get lucky soon."
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- The market endured a seesaw session. Stocks rose at the
open after a rosy outlook from Dell Computer Corp. DELL.O and a 14 percent
increase in earnings from General Electric Co. GE.N . But the rally faded
as a surprise tumble in consumer sentiment fed worries that consumer spending,
which supports about two-thirds of the economy, may wane in coming months.
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- "If the consumer slows, then the economy may be
a little worse than expected and that will cause some nervousness,"
said Barry Hyman, chief investment strategist at Ehrenkrantz King Nussbaum.
-
- The blue-chip Dow Jones industrial average .DJI fell
117 points, or 1.33 percent, to 8,684.53, based on the latest available
numbers, after opening higher and then dropping 2 percent. The broader
Standard & Poor's 500 index .SPX ended down 5.98 points, or 0.64 percent,
to 921.39.
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- The Nasdaq Composite .IXIC ended off 0.94 point, or 0.07
percent, at 1,373.49. The technology-packed index had rallied more than
2 percent on Dell's upbeat outlook and then dipped in and out of negative
ground.
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- Doubts over corporate credibility, fears of another terror
attack and apprehension over the second-quarter earnings season are roiling
Wall Street. The S&P 500 lost 6.85 percent and the Dow sank 7.4 percent
during the week -- both suffering their largest weekly drops since the
stock market reopened following the September attacks. The Nasdaq sank
5.2 percent, its largest weekly decline since April.
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- Declining stocks beat out advancers by a ratio of 19
to 13 on the New York Stock Exchange and 9 to 8 on the Nasdaq. More than
1.59 billion shares changed hands on the Big Board and 2 billion on Nasdaq
in moderate trading.
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- Stocks pared gains early in the day after a report showed
that U.S. consumer sentiment sank in early July as the stock market drubbing
soured Americans' expectations. The University of Michigan's preliminary
consumer sentiment index fell to its lowest level since November 2001 in
July, down to 86.5 from 92.4 in June.
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- Rumors swirling around consumer products giant Procter
& Gamble Co. PG.N added more pressure to the market late in the day.
P&G's chief financial officer said late Friday that speculation in
the stock market about possible accounting irregularities at the consumer
products giant had no basis. The Dow component ended down $2.32 to $83.63.
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- Home Depot dragged on the Dow with a $2.31 drop to $29.09.
The home improvement retailer sank to $28.40 earlier in the day, hitting
its lowest level since October 1998. Merrill Lynch downgraded the retailer,
citing tough competition from the company's main rival, Lowe's Cos. LOW.N
, and sluggish sales.
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- Duke Energy Corp. DUK.N kept worries over corporate credibility
alive. The utility, which plunged $3.20 to $24.75, said it received subpoenas
from federal agencies requesting documents relating to its trading activities.
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- But the session had a few bright spots. Dell rose $1.10
to $25.03. The No. 2 personal computer maker raised its second-quarter
earnings and revenue guidance, citing market share gains. Several analysts
raised their estimates for Dell's results for the rest of the year.
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- General Electric rose $1.25 to $28.60. The Dow member
said second-quarter earnings rose 14 percent, powered by gas turbine sales.
GE executives backed the conglomerate's full-year earnings forecast, which
analysts saw as a modestly positive sign for the broader economy.
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- Juniper Networks Inc. JNPR.O headed up 48 cents to $7.70
after the telecommunications equipment maker's second-quarter revenues
were stronger than Wall Street expected. Rival Cisco Systems Inc. CSCO.O
rose 33 cents to $14.38.
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- The University of Michigan report showing a drop in consumer
sentiment contrasted with firm retail sales numbers issued before the market's
open. The Commerce Department said retail sales bounced back in June, rising
1.1 percent overall and, excluding cars, by 0.4 percent. (Additional reporting
by Doris Frankel in Chicago)
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