Big Downdraft For The Nasdaq; PIXR Earnings Shine
In the
biggest one-day
percentage drop since last September,
the Nasdaq fell Wednesday, losing 2 1/2%. The
index closed on its 50-day moving average. After the close yesterday Cisco gave
a cautious outlook on technology spending. Cisco fell 9% today, to 24.08, the
biggest drop since October 2002. Investors rotated money into defensive stocks
like consumer staples and pharmaceuticals.
Oracle
(
ORCL |
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raised its bid from $19.50 to $26 in its takeover of PeopleSoft
(
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a 19% premium over yesterday’s closing price — the company’s last and best
offer. Defense contractor Northrop Grumman
(
NOC |
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PowerRating) posted a profit of
$224 million on revenue of $7.1 million, a 148% jump. Higher pension costs
offset stronger sales of its space technology and electronic systems. Global
sales of cell phones for 2003 blew past previous estimates, with 2004 sales
expected to exceed 560 million units. Sales of cell phones with calendars,
emails, pictures and music capability are strong. Continued pricing pressures
caused Nokia
(
NOK |
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(
MOT |
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while South Korea’s Samsung Electronics, LG and the joint venture between Sony
(
SNE |
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(
ERICY |
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After the close, Pixar
(
PIXR |
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reported $1.44 vs $1.27 estimate, with profit and revenue more than tripling.
Last week Pixar broke off its relationship with Walt Disney. Pixar’s next move,
“The Incredibles,” is due out later this year. Allstate
(
ALL |
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reported $1.06 vs $1.04 and raised its quarterly dividend by 22%. Fluor
(
FLR |
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reported $0.63, beating by $0.06; Cerner
(
CERN |
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which beat by a penny. Boyd Gaming
(
BYD |
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ahead.
| Dow | -34.44 |
10470.74 |
| S&P 500 |
-9.51 | 1126.52 |
| Nasdaq | -52.07 |
2014.14 |
The day’s leading sectors were Pharmaceuticals
(
DRG.X |
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PowerRating) +0.70%,Â
Health Care
(
$HCX.X |
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PowerRating) +0.34%, and Retail
(
RLX.X |
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Chart |
News |
PowerRating) +0.19%.
Weak today were Networking
(
NWX.X |
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PowerRating) -5.18%, and Semis
(
SOX.X |
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PowerRating) -2.97%.
Economic news releases included
a strong ISM services number, and a 1.1% jump in factory orders.
Accounting audits done by
China’s state audit office showed $652 million in irregularities in China
Life’s
(
LFC |
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News |
PowerRating) predecessor; which sent the stock down 7%, to 26.67. LFC
was the biggest IPO ever last year at $3.5B.
10-year Notes were -045
at 113 220.
The dollar
was +0.06 at 86.85.
Gold was +2.00 at
400.77.
Crude Oil was -0.95 at
33.10.
Volume was
1,621,686,000 on
the NYSE, and 2,250,169,000 on the Nasdaq.
Market breadth was negative.
| NYSE | Issues | |
| Advancing | 897 | Up Vol 410 |
| Declining | 2360 | Down Vol 1161 |
| Ratio | 2.63 | 2.83 |
| Nasdaq | ||
| Advancing | 720 | Up Vol 290 |
| Declining | 2487 | Dow Vol 1908 |
| Ratio | 3.45 |
6.57 |
Stocks in the news:
Harrah’s Entertainment
(
HET |
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posted lower earnings due to higher gaming taxes and construction of new
properties. The company’s earnings fell to $134.8 million on revenue of $1.04
billion.
Oxford Health Plans
(
OHP |
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PowerRating)
reported earnings of $95.5 million on higher premium collections. Revenue topped
$1.38 billion, with membership rates falling to $1.43 million. For the year,
membership enrollment is expected to be flat, with revenue at $5.76 billion.
Ciena
(
CIEN |
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PowerRating) said that the
timing of one of its orders would cause its first-quarter revenue to be lower
than previous estimates. The company now expects revenue of $66.4 million with a
loss of 9 cents.
Retailer Linens ‘n Things
(
LIN |
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PowerRating)
rose on higher earnings with revenue up at $788.3 million. Earnings rose to
$46.1 million, a penny better than analysts’ consensus. Same-store sales rose
4.7% from the year-ago period.
bricew@tradingmarkets.com