Dow Down 123, Nasdaq Down 34
Dow Down 123, Nasdaq Down 34
Oct. 22, 2003
NEW YORK (AP) _ Investors expressed their dissatisfaction with third-quarter earnings reports Wednesday, sending stocks sharply lower after companies failed to meet Wall Street's high expectations. The Dow Jones industrials fell more than 100 points.
In early afternoon trading, the Dow Jones Industrial average was down 123.40, or 1.3 percent, at 9,624.24. The broader gauges were also lower. The Nasdaq composite index dropped 33.56, or 1.7 percent, to 1,907.34. The Standard & Poor's 500 index was down 13.73, or 1.3 percent, at 1,032.30.
Disheartening results prompted a sell-off in several sectors, notably health care and technology. Analysts said investors were eager to safeguard their gains after a month of bidding stocks higher in anticipation of a robust quarter.
``We've had plenty of reason for profit-taking, and it's all because of these earnings,'' said Todd Clark, head of listed equity trading at Wells Fargo Securities. ``We had a pretty nice rally and now people are looking to take their money off the table.''
Analysts blamed some of the decline in the Dow on a disappointing report from Merck & Co. Large pharmaceutical companies, which investors depended on for predictable earnings during the economic downturn, are likely to lose their appeal during the recovery, said Kevin Caron, market strategist at Ryan, Beck & Co.
``Investors have come to rely on pharmaceuticals for growth in revenue and pipeline, but those growth rates are slowing,'' said Caron, whose firm reduced its stake in health care last month in favor of technology, industrial and material goods stocks. ``That's going to be an additional challenge for those companies going forward.''
Merck, which missed analysts' forecasts by 3 cents a share and announced plans to cut about 4,400 jobs, declined $3.15, or 6.4 percent, to $45.76. Other pharmaceutical companies reporting earnings Wednesday also fell.
Schering-Plough Corp., stung by slumping sales and the loss of patent protection for its one-time blockbuster allergy drug Claritin, declined 91 cents, or 5.7 percent, to $15.09. Wyeth also reported a loss, in part due to charges related to its diet drug litigation. It was down $2.54, or 5.6 percent, at $43,26.
Amgen Inc., which reversed a third-quarter loss on strong sales of an anemia treatment for cancer patients, beat analyst expectations by 2 cents a share in results released Tuesday, but failed to impress the market. Morgan Stanley cut its rating to ``equal-weight'' from ``overweight,'' and the bio-tech firm dropped $3.14, or 4.9 percent, to $60.51.
Investors also punished Amazon.com Inc., which beat analysts' expectations by a penny a share but narrowed its earnings forecast for next year. The online retailer, which was downgraded by several brokerages, declined $3.90, or 6.6 percent, to $55.45.
Advancers included Lucent Technologies, which reported a quarterly profit for the first time since 2000. The telecommunications firm was up 16 cents, or 6.5 percent, at $2.61.
Declining issues outnumbered advancers about 4 to 1 on the New York Stock Exchange. Volume came to 690.80 million shares, compared with 610.42 million traded at the same point Tuesday.
The Russell 2000 index, which tracks smaller company stocks, declined 7.39, or 1.4 percent, to 518.14.
Overseas, Japan's Nikkei stock average finished 1.3 percent lower Wednesday. In Europe, France's CAC-40 dropped 1.8 percent, Britain's FTSE 100 declined 1.5 percent and Germany's DAX index lost 1.9 percent.
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