Share this article

print logo


Stocks fell today as investors, wary about the economy and awaiting the U.S. response to the Sept. 11 terrorist attacks, collected profits after Wall Street's two-day advance.

Wall Street analysts cut profit estimates for IBM, Intel and dozens of other companies today, citing the effects of the attack. Power producer AES Corp. and chipmaker Micron Technology dropped after cutting profit forecasts.

"Profits aren't going to be there," said Michael Rail, director of technology trading at Credit Suisse First Boston. "There is no reason now to step in and buy" he said of technology stocks, since profits are unlikely to rebound before the middle of next year.

At 1 p.m., the Dow Jones industrial average was down 108.84 at 8,551.13, cutting into its 424-point gain of the previous two sessions.

The Nasdaq composite index was off 29.46 at 1,472.18, while the broader Standard & Poor's 500 index dropped 7.45 to 1,004.82.

The most popular issues were concentrated in sectors considered less risky in times of uncertainty, including pharmaceuticals and consumer goods. Johnson & Johnson rose 64 cents to $53.58, while Procter & Gamble climbed $1.06 to $72.06.

Boeing was off 33 cents at $34 on worries that its aircraft business will be hurt by consumers' reluctance to fly because of the terrorist attacks. It had managed a small gain Tuesday on its chairman's comments the company still expected profitability, but investors were still ambivalent.

Delta Air Lines gained 48 cents to $25 on news of 13,000 job cuts because of declining air travel.

IBM slumped $2.14 to $92.31 after Goldman, Sachs & Co. analyst Laura Conigliaro lowered her profit forecast for the company. She also cut earnings estimates for EMC Corp. and Sun Microsystems.

The attacks that destroyed the World Trade Center and damaged the Pentagon probably delayed some sales, she said, and "raised new questions in the minds of corporate users about near-term spending levels."

Intel, which has lost 18 percent since the attacks, fell 47 cents to $21.21. Goldman's Terry Ragsdale cut 2002 earnings estimates for the largest maker of personal computer microprocessors by almost a third.

A recovery in the demand for personal computers that would have increased the need for chips will now be postponed because the attacks tempered spending by consumers, Ragsdale wrote in a research note. Goldman said Intel is now its least favorite stock on the firm's list of stocks that are recommended for purchase.

Semiconductor, computer software and personal computer companies were the biggest drag on the S&P 500.

Xilinx, which makes programmable chips, declined $1.72 to $21.15, while rival Altera Corp. fell $1.13 to $17.39. Microsoft, the biggest maker of personal computer software, lost 41 cents to $50.89.

Micron fell 99 cents to $20.25. The biggest U.S maker of computer-memory chips reported a fiscal fourth-quarter loss as average prices plunged 85 percent and sales slid to their lowest level since 1994.

Micron said it lost 76 cents a share, worse than the 34-cent loss that was forecast by analysts polled by earnings tracker Thomson Financial/First Call. Sales in the quarter, which ended Aug. 30, were $480.3 million.

"It's pretty staggering," said Tim Mahon, an analyst at Credit Suisse First Boston, who had expected sales of $737 million. "The top-line miss was enormous and the pricing environment is not going to get better any time soon."

AES plunged $11.26 to $13. The U.S. power producer with business in 27 countries said its profit this year will be as much as 30 percent below estimates because of lower earnings from Brazil and U.K. units, as well as delays in acquisitions.

Other power producers fell. Calpine Corp. lost $1.95 to $21.80 and Duke Energy fell $1.61 to $35.99.

American Express was up 47 cents at $27.40.

There are no comments - be the first to comment