Market pulls back after earnings reports issued
NEW YORK (AP) – Wall Street pulled back Tuesday as a disappointing outlook from AOL Time Warner prompted investors to cash in more profits from the market’s recent rally. The downturn wasn’t surprising, given how far stock prices have come recently, with the Dow Jones industrials posting eight straight weekly wins and the broader market advancing for seven of the past eight weeks.
While investors are growing more confident about the economy and earnings, they are expected to take some profits.
In the first hour of trading, the Dow Jones industrial average was down 83.99, or 1 percent, at 8,778.58.
The broader market was also lower. The Nasdaq composite index fell 27.01, or 1.8 percent, to 1,457.77.
The Standard & Poor’s 500 index declined 10.14, or 1.1 percent, to 924.39.
Investors punished AOL, down $1.85 at $14.72, after the company affirmed its 2002 earnings forecast for its America Online unit, but warned of sinking advertising revenue for the year ahead.
Auto stocks traded lower ahead of November sales figures due later. DaimlerChrysler fell 42 cents to $35.15, while Ford declined 37 cents to $11.08.
Brokerage downgrades hurt other issues. Supermarket operator Albertson’s fell $1.19 to $22.38 on a downgrade from J.P. Morgan, while Marriott declined 95 cents to $34.74 on a downgrade from Deutsche Securities.
Declining issues outpaced advancers nearly 8 to 3 on the New York Stock Exchange.
Volume came to 180.03 million shares, below the 215.54 million traded at the same point Monday.
The Russell 2000 index, the barometer of smaller company stocks, fell 5.23, or 1.3 percent, to 403.31.
Overseas, Japan’s Nikkei stock average finished Tuesday up 0.3 percent. In afternoon trading in Europe, France’s CAC-40 fell 1.9 percent, while Britain’s FTSE 100 and Germany’s DAX each declined 1.3 percent.
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