Warnings Whack Stocks
Earnings warnings from Apple and Bank of America stung stocks Wednesday, as
all three major averages gave back a good chunk of Tuesday’s gains. The
protracted election battle also cast a shadow, leaving the Nasdaq down 3.2%, the
Dow off 2.1%, and the S&P 500 1.8% lower.
Nasdaq volume decreased 9% from Tuesday’s big level, as 2.28 billion shares
traded. NYSE volume was 3% lower, with 1.36 billion shares changing hands.
“We’re seeing a retracement from yesterday’s strength after Apple’s
pre-announcement, but it still feels like the market’s in a better phase than it
was prior to Greenspan’s testimony,” said Rob Cohen, Head of Listed Stock
Trading, CS First Boston.
“It’s just digesting what we saw yesterday, and it’s probably a healthy
step for the market to digest it and build a base before we go to higher
levels,” he added.
According to preliminary numbers, the Nasdaq fell 92.52 to 2797.28, the Dow
sank 233.59 to 10,665.13, and the S&P 500 lost 25.04 to 1351.50.
Top sectors were gold and silver
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up 1.0%, and telecom
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Weak sectors were semiconductors
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down 3.3%, and drugs
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Banks have rallied recently on a growing consensus that rates will be heading
lower, but an earnings warning from Bank of America
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Wednesday. Concerns over its weakening loan portfolio sent BofA down 3 3/16 to
38.
Dow winners were Home Depot
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AT&T
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and Intel
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Traders will be keeping a close eye on Intel, since its close down 4 3/16 to
31 13/16 leaves it at its lowest level since October 1999.
Looking ahead, the closely watched employment report for November will be
released Friday at 8:30 AM ET. Analysts expect to see that 148,000 new jobs were
created in November.