Wall Street dips on recovery worries
NEW YORK (AP) – Investors retreated further from Wall Street Thursday, bidding stocks slightly lower on worries about the strength of the economic recovery and a profit warning from Bristol-Myers Squibb. The selling reversed a modest upturn from earlier when buyers took advantage of lower prices, mostly in blue chips following a four-day losing stretch for the Dow industrials. The market failed to hold its gains largely because of Bristol-Myers, which as a drug stock should be considered less risky during economic uncertainty.
“It brings up the question of what is safe,” said Barry Hyman, chief investment strategist at Ehrenkrantz King Nussbaum.
In late afternoon trading, a fluctuating Dow was down 9.75, or 0.1 percent, at 10,188.54, having risen as much as 63.59 earlier. The blue chips dropped 228.62, or 2.2 percent, over the last four sessions.
The broader market was also lower. The Nasdaq composite index fell 13.11, or 0.7 percent, to 1,771.24, having declined 78.27 Tuesday and Wednesday. The Standard & Poor’s 500 index slipped 4.98, or 0.4 percent, to 1,120.42.
Analysts said the market will have a difficult time sustaining an upturn as investors have little reason besides attractive prices to buy stocks. Indeed, the market’s major indexes fluctuated throughout Wednesday’s trading.
Investors are concerned that upcoming first-quarter earnings reports will be disappointing and that corporate outlooks will remain bleak. Mounting tension in the Middle East has also heightened fears in the market that the conflict will lead to higher oil prices.
“People get fed up with not making any money. You are maybe getting some of that. … I think the upside is limited,” said Gary Kaltbaum, market technician for Investors’ Edge Partners in Orlando, Fla.
Bristol-Myers plunged $6.02, or 16 percent, to $31.68 after warning late Wednesday that its first-quarter and yearly earnings will miss analysts’ expectations. The drug maker expects 2002 profits to decline 25 to 30 percent. Other pharmaceutical issues declined including Merck, down $1.38 at $55.91.
Wall Street’s losses were spread across an array of industries. J.P. Morgan Chase fell 86 cents to $34.15, and Alcoa, which on Friday will be the first Dow industrial to release first-quarter results, declined 60 cents to $36.65.
The technology sector also declined.
“Technology is not ready yet to be a leadership sector,” said Hyman, the Ehrenkrantz King Nussbaum analyst.
Microsoft fell 80 cents to $55.53 after president and chief operating officer Rick Belluzzo resigned and the software maker announced restructuring plans that will eliminate his job.
A.G. Edwards upgraded Microsoft’s shares to “buy” from “hold.”
One of the steepest tech losses came from Check Point Software, tumbling $5.51 to $21.95 after saying it will miss analysts’ first-quarter earnings and revenue forecast. The company blamed the ongoing slump in spending on information technology by other companies.
Among the biggest gainers, Bed Bath & Beyond rose $1.99 to $33.58 after reporting fourth-quarter earnings that surpassed Wall Street’s forecast by 2 cents a share.
General Motors rose 53 cents to $59.88 after Merrill Lynch raised its second-quarter and yearly earnings estimates for the company, citing increased expectations for GM’s North American production.
The Russell 2000 index, the barometer of smaller company stocks, fell 0.91, or 0.2 percent, to 495.69.
Declining were even with advancers on the New York Stock Exchange. Volume came to 974.60 million shares, ahead of the 901.63 million traded at the same point Wednesday.
Overseas, markets were lower Thursday with Japan’s Nikkei stock average finishing down 0.2 percent. In Europe, Germany’s DAX index lost 0.8 percent, France’s CAC-40 fell 2.0 percent, and Britain’s FT-SE 100 declined 0.7 percent.
—
On the Net:
New York Stock Exchange: http://www.nyse.com
Nasdaq Stock Market: http://www.nasdaq.com