- NEW YORK (Reuters) - Worries
about corporate earnings slammed stocks on Tuesday, sending the blue-chip
Dow Jones industrial average to its seventh-straight decline and dashing
hopes for a follow-through to Monday's rebound.
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- Even comments from Federal Reserve Chairman Alan Greenspan
that the U.S. economy has held up "remarkably well" failed to
snap widespread pessimism. The Standard & Poor's 500 index closed at
its lowest since August 1997.
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- "There's more fear than fundamentals," said
Thomas Garcia, who helps manage $2.5 billion for Thornburg Investment Management.
"People are selling just in case earnings are weak and the (hoped-for)
outlook isn't there. You know that some people are panicking right now."
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- Although positive results from wireless telephone company
Nextel Communications Inc. underpinned technology stocks most of the session,
early gains disappeared as investors pulled out ahead of upcoming earnings
from technology bellwether Intel Corp. .
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- Caterpillar Inc. fanned worries the second-quarter earnings
season will disappoint after the world's No. 1 construction equipment maker
slashed its full-year outlook, citing the slow pace of capital spending.
Caterpillar helped lead the Dow average to its first seven-session losing
streak since the week after the Sept. 11 attacks.
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- "It's a disjointed market out there," said
Dan McMahon, head of block trading for CIBC World Markets. "There
are concerns that companies will start guiding lower for the third quarter,
even if their second-quarter earnings are in line" with expectations,
he said.
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- The Dow Jones industrial average lost 166.08 points,
or 1.92 percent, to 8,473.11, according to the latest available data. Earlier
in the seesaw session, the Dow almost clambered into positive territory
before dipping again.
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- The broader Standard & Poor's 500 Index was down
16.99 points, or 1.85 percent, at 900.94. The technology-laced Nasdaq Composite
Index slumped 7.36 points, or 0.53 percent, at 1,375.26, after spending
most of the session on the plus side.
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- Comments from Greenspan did little to reassure Wall Street.
In his semiannual monetary policy testimony to Congress, Greenspan lauded
the U.S. economy's resilience but warned that wounds from corporate scandals
and a stock rout will take time to heal.
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- "He pretty much said everything's going to be OK
but nobody believed him," said Garcia. "People are concentrating
on whether earnings are going to be as good as we think."
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- The market has endured some rocky sessions over the past
few weeks and is floundering near 5-year lows as fears of more accounting
scandals and apprehension over the second-quarter earnings season rattle
investors.
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- Some traders remained on the sidelines ahead of results
from Intel Corp., the world's No. 1 maker of computer chips, expected to
report financial results after the market closed. Shares dipped 76 cents
to $18.36.
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- Roughly two-thirds of S&P 500 companies and half
of the Dow 30 members are set to release results over the next two weeks.
Earnings for S&P 500 companies are expected to slip 1.3 percent in
the second quarter from year-ago levels, according to research firm Thomson
First Call.
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- Wary investors are sifting through the first wave of
quarterly earnings reports, desperate for signs of a turnaround in battered
corporate profits. Nextel, the nation's No. 5 wireless telephone company,
offered some good news by posting a quarterly profit that was driven by
strong customer demand.
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- Nextel gained $1.53, or 30.6 percent, to $6.53 and was
the most active share on the Nasdaq. Other wireless stocks surged, including
AT&T Wireless Services, which climbed 20 cents, or 3.3 percent, to
$6.20.
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- Also on the upside, Parametric Technology Corp. advanced
25 cents, or 8.3 percent, to $3.26 after the software maker said its net
loss widened but stuck by its revenue outlook and forecast for breaking
even in the fourth quarter.
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- But Caterpillar sank $2.19 to $43 after the Dow component
reported lower second-quarter earnings and cut its full-year forecast as
capital spending remains weak.
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- Discount retailer Target Corp. fell $1.82, or 5 percent,
to $34.62 after saying weekly sales fell below its plan. Wal-Mart Stores
Inc. also fell, dropping $3.56 to $49.88, even after saying healthy demand
for household items and food helped keep sales within its July growth forecasts.
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- Diversified health-care group Johnson & Johnson gained
$1.10 to $50.10 after the Dow member said quarterly profits rose 11.5 percent,
fueled by strong sales of medical devices and prescription drugs.
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- Home improvement retailer Home Depot Inc. rose 54 cents
to $30.54. The Dow component reaffirmed its long-term revenue and earnings
goals and announced the repurchase of up to $2 billion of its stock.
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- General Motors Corp., the world's No. 1 automaker, lost
$2.08 to $45.84. The Dow member posted a sharp rise in its earnings as
it slashed costs and racked up strong U.S. sales. But worries persisted
the stock market drop could make it more difficult for automakers to fund
their pension plans.
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- J.P. Morgan Chase & Co. Inc. added pressure to the
Dow with a drop of $1.58 to $28.50. The No. 2 U.S. bank holding company,
scheduled to report second-quarter results on Wednesday, denied rumors
in European markets that it was having liquidity problems.
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- With additional reporting by Doris Frankel and Brendan
Intindola
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