Wanted: Stellar Earnings
Despite a generally positive start to earnings season, stocks suffered a slow
and steady decline Tuesday that sent the Nasdaq down 2.3%, the Dow down 1.5%,
and the S&P 500 down 1.8%. Traders appeared reluctant to take positions
ahead of potential earnings shortfalls.
Nasdaq volume rose 8% above Monday’s level, as a robust 1.92 billion shares
changed hands while NYSE volume increased by 16% to 1.16 billion shares.
“Last week, earnings were mixed at best, but after the Gateway report,
obviously, there was hope that maybe investors would start embracing these
numbers more favorably. Unfortunately, I think there’s still not enough grand
slams, and we’re just seeing earnings beat estimates by only 1 or 2 cents,”
said Charles Payne, President, WallStreetStrategies.com.
“The Street still hasn’t been as harsh as it’s been, but it’s still
apparent it’s looking for something dynamic and extraordinary. We see continued
pressure in the semiconductor index, which really is going to make it tough.
There’s no way the Nasdaq can have a sustainable rally without the help of the
semis,” he added.
Top sectors included biotechnology
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up 1.3% and pharmaceuticals
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Under the most pressure were forest and paper products
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4.0%, Internets
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down 9.4%.
Broadvision
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26 1/8 following word the company would be added to the S&P 500. An upgrade
from Prudential also helped the stock.
Internet stocks continued to log off, as stocks that were once the Net’s
blue-chip darlings further collapsed. Hitting 52-week lows were AOL
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down 17%, Yahoo!
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down 10%.
Dow winners were SBC Communications
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up 3.0%, and Alcoa
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Home Depot
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After the bell, Intel
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cents per share, topping analyst estimates of 38 cents per share. After closing
at 36 3/16, Intel was trading up to 38 in after-hours trading.
Looking ahead, September’s Consumer Price Index numbers and the September new
housing starts will be released on Wednesday at 8:30 AM ET. Estimates look for a
0.4% increase in the CPI, a 0.2% increase in the core rate, and 1.54 million new
housing starts.