Sell The News
Despite a slew of better-than-expected earnings reports, the Nasdaq sold off
sharply Wednesday for the second day in a row, plunging nearly 3% to almost erase last week’s big gains. Losses in Microsoft and Intel weighed heavily on
the averages, though the Dow did manage to keep its losses limited to a 0.4%
decline, while the S&P 500 eased 0.8%.
Volume was about even with Tuesday’s moderate levels, as 906 million shares
traded on the NYSE and 1.42 billion shares changed hands on the Nasdaq. Analysts
remained generally upbeat about the market’s prospects and felt that the market
had become a bit extended to the upside.
“After a big run-up in technology and our glamour stocks, it’s time for
a pullback here. I think it fits in well right at earnings. I think it’s
individual stock time, as a lot of stocks are breaking down,” said Gary
Kaltbaum, Chief Technical Analyst, JW Genesis Securities.
“There are still too many stocks in good technical shape for this to turn
into a disaster. Support on the Nasdaq is around about 4075, and yes, we can go
below, but I’m still seeing some decent action,” he added.Â
According to preliminary numbers, the Nasdaq fell 121.55 to 4055.62, the Dow
slipped 43.84 to10,696.08, and the S&P 500 eased 11.78 to 1481.96.
Top sectors were banks
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up 0.3%, and oils
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semiconductors
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and biotechs
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Shares of Microsoft
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the company’s 44-cent-per-share earnings beat analyst expectations by 2 cents.
Analysts were not happy with Microsoft’s revenue numbers and a couple of firms
even lowered their ratings on the software giant.
Intel
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per share earnings, but that didn’t prevent negative comments from analysts that
sent the stock down 4 7/8 to 138 1/8.
Joining Microsoft and Intel as the biggest Dow losers were International
Paper
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down 2.9%. Dow winners were Phillip Morris
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Coca-Cola
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The banking group was strong, thanks to a big restructuring program initiated
by new Bank One
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on news the company would cut its dividend, layoff workers, and take a huge
charge-off. Dimon’s former employer, Citigroup
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stocks after it posted better-than-expected second quarter earnings. Citigroup
rose 1 5/16 or 2% to 68.
Looking ahead, June’s housing starts and building permits reports will be released Thursday at 8:30 AM ET.
Street consensus looks for 1.57 million housing starts and 1.50 million new
building permits.