Stocks skid as worries grow

Industrials fall 135 points while Nasdaq tumbles 42

Volume passes 1.8 billion shares

Iraq and cost of money overshadow profit news

April 29, 2004|By BLOOMBERG NEWS

NEW YORK - U.S. stocks fell as fighting in Iraq and the prospect of higher interest rates overshadowed better-than-expected corporate profits.

The declines in the Dow Jones industrial average and the Nasdaq composite index were the biggest since March 15. The Dow dropped 135.56, or 1.3 percent, to 10,342.60, and the Nasdaq shed 42.99, or 2.1 percent, to 1,989.54.

The Standard & Poor's 500 index slid 15.70, or 1.4 percent, to 1,122.41. The benchmark has lost 3.1 percent since hitting a 23-month high Feb. 11.

Elsewhere on the broad market, the Russell 2000 index declined 13.70, or 2.3 percent, to 577.06. The Wilshire 5000 total market index, the broadest measure of U.S. shares, lost 161.90, or 1.4 percent, to 10,967.44. Based on changes in the Wilshire, the total value of U.S. stocks decreased by $194.28 billion.

The Sun-Bloomberg index of the top stocks in Maryland dipped 3.88 to 271.73.

More than three stocks fell for every one that rose on the New York Stock Exchange. About 1.86 billion shares changed hands on the Big Board, the most since March 11.

"Right now, the biggest concern on investors' minds is the Iraq situation," said James Maguire, a specialist at LaBranche & Co. "Nobody knows where things are going from here, and the market hates uncertainty."

Concern that the Federal Reserve might soon raise interest rates to cool the economy and fend off inflation also sent stocks lower.

The decline in an index of raw materials shares, its biggest in more than a year, resulted from concern that demand from China will erode. Growth in Asia's second-largest economy will slow to less than 8 percent this year from a six-year high of 9.1 percent last year, said Wu Xiaoling, vice governor of the People's Bank of China.

Alcoa shares lost $1.29 to $31.01, and U.S. Steel dropped $2.82 to $30.56. Freeport McMoRan Copper & Gold Inc. slumped $2.30 to $29.50.

Newmont Mining Corp., the world's biggest gold producer, dropped $2.72 to $37.47, an eight-month low.

Nortel Networks Corp. plunged $1.59, or 28 percent, to $4.05, a five-month low. North America's largest maker of telephone equipment fired Chief Executive Officer Frank A. Dunn, saying a second restatement in less than six months might reduce last year's earnings by 50 percent. The company also said it will delay its first-quarter earnings report for an accounting review. The shares had more than doubled in the past year.

Competitor Lucent Technologies Inc. lost 16 cents, or 4.4 percent, to $3.45.

In Toronto, the Nortel decline lopped about $9.2 billion in Canadian currency from the S&P/TSX composite index's market capitalization.

In other Canada-related news, AT&T Wireless disclosed in a Securities and Exchange filing that it was considering selling its stake in Rogers Wireless Communications. The holding includes about 27.7 million shares of Rogers' Class A stock and 20.9 million Class B shares.

AT&T Wireless shares dipped 0.5 percent while Rogers shares fell 4.8 percent.

RF Micro Devices Inc. shed 72 cents to $7.75. The maker of chips for mobile-phone companies including Nokia Oyj forecast sales this quarter of as much as $171.6 million, less than the $172.2 million analysts expected.

Helping limit the decline in the Dow was Boeing Co., which rose 48 cents to $44.03 for its sixth day of gains. The second-biggest U.S. military contractor boosted its 2004 forecast by 30 cents to as much as $2.25 a share. The company also raised its 2005 forecast by 25 cents a share.

Comcast Corp., the world's largest cable-television operator, advanced 23 cents to $30.20 after the company withdrew its $54.1 billion unsolicited bid for Walt Disney Co. Disney, whose board had rejected Comcast's offer as too low, shed 23 cents to $23.95.

Comcast reported first-quarter net income of $65 million, or 3 cents a share, compared with a loss from continuing operations a year earlier. Revenue rose 9.9 percent to $4.91 billion.

Analysts forecast that S&P 500 index members would boost first-quarter profit by an average 25.1 percent, Thomson Financial said. About 352 of the benchmark's companies have reported results and 78 percent have exceeded the average estimate, Thomson said.

One such company was Bristol-Myers Squibb Co., the shares of which climbed 76 cents to $25.48 yesterday. The maker of the Taxol cancer drug said it earned, excluding some items, 41 cents a share in the first quarter, 2 cents more than the average estimate in a Thomson survey. Sales also exceeded analysts' forecasts.

McDonald's Corp. added 41 cents, or 1.5 percent, to $27.61 for the biggest advance in the Dow. The world's largest chain of hamburger restaurants said first-quarter revenue rose 16 percent to $4.4 billion, topping the average $4.27 billion estimate of 10 analysts polled by Thomson.

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