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The major averages sold off for the second day in a row with the Dow and S&P 500 making new lows for the year. Price action closed at the bottom of daily ranges, as broad-based selling was confirmed by similar moves in the semiconductors, broker/dealers, and retail. On the UN front, the US and UK announced they would consider altering their deadline given for Iraq disarmament, though would not hold out for the 45-day deadline proposed by "swing" nations on the UN Security Council.
The Dow Jones Industrial Average ($INDU.X | Quote | Chart | News | PowerRating) closed -0.58% at 7,524.06. The S&P 500 ($SPX.X | Quote | Chart | News | PowerRating) closed -0.83% at 800.73. The Nasdaq ($COMPQ | Quote | Chart | News | PowerRating) closed -0.53% at 1,271.47.
The loan positive sector at the close was consumer ($CMR.X | Quote | Chart | News | PowerRating), +0.16%.
Leading to the downside were airlines ($XAL.X | Quote | Chart | News | PowerRating), -9.94%, oil service ($OSX.X | Quote | Chart | News | PowerRating), -3.11%, gold and silver ($XAU.X | Quote | Chart | News | PowerRating), -2.83%, and Internet ($INX.X | Quote | Chart | News | PowerRating), -2.29%.
In economic news, wholesale inventories fell 0.2% vs. an expected gain of 0.2%.
The Ten Year Note (TYH3 | Quote | Chart | News | PowerRating) was -070 at 117 190.
The US dollar (DXH3 | Quote | Chart | News | PowerRating) was +0.16 at 98.08.
Volume was average, with the NYSE coming in at 1,379,413,000 and the Nasdaq at 1,238,153,000.
Market breadth was negative, with NYSE declining issues over advancing issues by a ratio of 1.40, and down volume over up volume by a 2.50 ratio. Nasdaq declining issues over advancing issues came in at 1.21, and down volume beat up volume by a 1.79 ratio.
The VIX was +0.23 at 38.08. The TRIN was -4.09 at 1.77.
Leading the Dow down were:
AT&T Corp. (T | Quote | Chart | News | PowerRating), -4.70% at 16.01, JP Morgan (JPM | Quote | Chart | News | PowerRating), -3.21% at 20.75, United Tech (UTX | Quote | Chart | News | PowerRating), -3.10% at 54.23, General Motors (GM | Quote | Chart | News | PowerRating), -2.47% at 29.92, Citigroup (C | Quote | Chart | News | PowerRating), -2.01% at 31.55, and Alcoa (AA | Quote | Chart | News | PowerRating), -1.22% at 18.57.
Stocks in the news:
Appliance maker Maytag (MAY | Quote | Chart | News | PowerRating), -0.39% at 18.01, issued a profit warning, saying it won't meet its first-quarter estimates due to weakness in its Hoover floor-care products.
Mobile phone giant Nokia (NOK | Quote | Chart | News | PowerRating), +0.23% at 12.90, said that first-quarter revenue will come in at the low end of expectations with its networks division posting a loss.
Aerospace company Goodrich (GR | Quote | Chart | News | PowerRating), -0.48% at 13.60, sold off after announcing lowering its earnings guidance for the year.
Food processing company Heinz Co. (HNZ | Quote | Chart | News | PowerRating), +0.26% at 29.70, beat its third-quarter earnings by $0.02 with profits of $0.54 per share.
Drug maker King Pharmaceutical (KG | Quote | Chart | News | PowerRating), -23.45% at 12.17, announced that it is being investigated by the SEC, though is not aware of any specific reasons for it.
In the airline sector, Delta Airlines (DAL | Quote | Chart | News | PowerRating), -1.91% at 6.75, announced that it expects negative revenue in the first-quarter due to "depressed consumer demand
."Education company Sylvan Learning Systems (SLVN | Quote | Chart | News | PowerRating), +30.09% at 14.87, rallied after the company said it will now focus only on its post-secondary education, while eliminating its K-12 business and Sylvan Ventures unit.
Travel reservations company Sabre Holdings (TSG | Quote | Chart | News | PowerRating), -3.28% at 15.01, lowered its guidance for the first-quarter and expects earnings per share to come in at $0.38-0.42 per share vs. previous estimates of $0.47-0.52 per share.
In reaction to warnings in the travel sector, Hotels.com (ROOM | Quote | Chart | News | PowerRating), -3.86% at 44.25, and Expedia (EXPE | Quote | Chart | News | PowerRating), -1.60% at 33.78, sold off in sympathy to Delta and Sabre Holdings. Expedia will begin trading today in accordance with its 2 for 1 stock split.
Home improvement retailer Sherwin Williams Co. (SHW | Quote | Chart | News | PowerRating), -3.04% at 24.82, issued an earnings warning for the first-quarter, and now sees earnings per share at $0.20-0.23 vs. previous estimates of $0.25.
Being added to the S&P Midcap 400 Index are Corinthian Colleges (COCO | Quote | Chart | News | PowerRating), +1.64 at 36.35, Ruby Tuesday Inc. (RI | Quote | Chart | News | PowerRating), +3.83% at 18.42, and O'Reilly Automotive Inc. (ORLY | Quote | Chart | News | PowerRating), +2.16% at 24.98.
danielb@tradingmarkets.com
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