Share this article

print logo

STOCKS FALL ON PROFIT WARNINGS

Profit warnings from Microsoft and Corning deflated investors' hopes about an economic recovery today and sent stock prices lower. A surge in consumer prices added to the market's ill humor.

The market maintained its focus on the future, disregarding better-than-expected results from some companies.

At 1 p.m., the Dow Jones industrial average was down 68.22 at 9,095.00. The Nasdaq composite index fell 18.26 to 1,634.46, while the Standard & Poor's 500 index declined 9.04 to 1,059.57.

Microsoft, which beat earnings expectations late Thursday, fell 23 cents to $56.98 after also warning that second-quarter and full-year earnings results would fall short of expectations.

Corning fell 28 cents to $7.74. The world's largest fiber-optics maker copied Microsoft, beating expectations but warning of reduced profits in the fourth quarter.

Gainers included companies that met or surpassed analysts' earnings expectations. Nokia, which beat forecasts and said it expects stronger earnings in the fourth quarter, rose $1.17 to $19.95. Gillette, which met targets, advanced $1.58 to $31.30.

Providian slid $6.04, or 49 percent to $6.36. The No. 5 U.S. issuer of MasterCard and Visa credit cards said fourth-quarter earnings will be at least 75 percent below expectations as the number of people who couldn't pay their credit card bills grew as the economy slowed.

PMC-Sierra fell $1.35 to $15.25. The maker of semiconductors for the telecommunications industry said its third-quarter loss was little changed and forecast lower sales for this quarter.

General Motors, the biggest carmaker, dropped $1.23 to $40.79 in Germany and Alcoa, the largest aluminum company, fell 60 cents to $31.30.

EBay shed $5.61 to $53.45 even as the No. 1 Internet auctioneer said third-quarter profit surged 24 percent as it attracted shoppers seeking bargains on clothing, housewares and garden items in a slowing economy.

EBay shares have risen 80 percent this year, so the price already reflects the growing earnings, some analysts say.

Oil shares fell as the price of crude dropped almost 5 percent this week to $21.45 a barrel. Exxon Mobil gave up 70 cents to $39.70 and is down 6 percent the past five days. Royal Dutch Petroleum fell $1.84 to $49.28 and has lost 9 percent this week.

Meanwhile, the biggest increase in inflation at the consumer level since May unnerved the market, which is hoping that the Federal Reserve will continue to lower interest rates to help the economy. The Consumer Price Index rose 0.4 percent, pushed higher by the biggest jump in gasoline prices in 15 months, the Labor Department reported.

There are no comments - be the first to comment