NEW YORK, Oct 19: Stocks sagged at midday on Friday as murky outlooks from companies like software titan Microsoft Corp. and lingering concern over the widening anthrax scare hung over Wall Street.
“There is still so much uncertainty in the market,” said James Park, senior vice president of brokerage Brean Murray & Co. “People are very cautious as to how react. Once there is visibility going forward, people will make more of a financial commitment to buying stocks. As much as I hate to say it, people are still spooked by this threat of bioterrorism.”
The Dow Jones industrial average fell 63.38 points, or 0.69 per cent, to 9,099.84. The broader Standard & Poor’s 500 Index was down 8.48 points, or 0.79 per cent, at 1,060.13. The tech-laced Nasdaq Composite Index dropped 17.36 points, or 1.05 percent, to 1,635.36.
Friday is the 14th anniversary of 1987 stock market crash, when the Dow index took a stunning 22.6 per cent plunge.
Losers beat out winners by a ratio of 4 to 3 on the New York Stock Exchange and 3 to 2 on Nasdaq. More than 600m shares changed hands on the Big Board and 768 million on Nasdaq.
Microsoft slipped 62 cents to $56.13, weighing on the Dow and Nasdaq. The company said it had not seen a huge impact from the Sept 11 attacks on New York and the Pentagon, but added the economic outlook was hard to forecast.
“The reason the market is struggling is that concerns about the economy and earnings are deepening,” said Hugh Johnson, chief investment officer at First Albany Corp. “The guidance we are getting from companies is very guarded and very cautious. A lot of investors are saying, ‘We don’t see a light at the end of tunnel. We don’t see anything that says the current profit recession is going to end.’”
Coca-Cola Co. rose $2.27 to $48.39, offering support to the Dow. Investment house UBS Warburg said it added the soft-drink giant as well as chocolate maker Hershey Foods Corp. to its highlighted stocks list. Hershey, which gained $1.48 to $63.54, reported higher earnings.
Credit card issuer Providian Financial Corp. plunged $7.25 to $5.15, ranking as the most active on the New York Stock Exchange. The company posted a 71-percent drop in profits amid customer defaults and said it will look for a new chief executive.
Finland’s Nokia rose $1 to $19.78 in active trading. The world’s largest mobile phone maker indicated it was weathering the current slowdown well, bolstered by its new range of phones.
McDonald’s Corp. fell $1 to $28.24, pressuring the Dow. Wall Street house Salomon Smith Barney cut its rating on the fast-food giant, citing disappointment with its US sales.
European share prices fell further on Friday as investors began to realize that economic recovery will be a long haul, particularly in Germany where the business climate is cooling palpably.
London’s FTSE 100 index sagged 2.1 per cent to 5,011.0 points, with investors upset by reports that the OECD expects growth in leading industrial economies to trickle ahead just 1.2 per cent next year.—Reuters