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Market's week ends with loss
©Associated Press NEW YORK -- Reduced outlooks from chip manufacturer Intel and drug maker Biogen sent technology stocks sharply lower Friday, but a late session rebound limited the damage in the broader market. Analysts were not impressed by the comeback, however. They attributed it to bargain hunting following two weeks of mostly losing sessions rather than any fundamental shift in investor confidence. "The semiconductor sector got hit pretty hard today, but the rest of the market pretty much held up. That's good to see," said Mike Kayes, chief investment officer at Eastover Capital. "But the big picture is still that the market needs to see earnings improve, and that hasn't happened yet." The Dow Jones Industrial Average closed down 34.97 at 9,589.76, after falling as much as 152 points and then briefly showing a gain. Thursday, the average fell 172 points. Broader stock indicators were also lower, particularly the technology-centered Nasdaq Composite Index, which fell 19.40, or 1.3 percent, to 1,535.48. The Standard & Poor's 500 index lost 1.62, or 0.2 percent, to close at 1,027.53. Friday capped a week in which the indexes alternated between steep losses and sharp gains. The Dow lost 3.4 percent, the Nasdaq tumbled nearly 5 percent and the S&P fell 3.7 percent. The Nasdaq and S&P are also closing in on their post-Sept. 11 lows; the Nasdaq has 112 points to go, the S&P is short by 61. The bulk of Friday's declines were concentrated in specific stocks that investors felt had disappointed them -- or had the potential to do so. Intel fell $5, or 18.5 percent, to $22 after it dropped its second-quarter sales forecast because of lower-than-expected demand for personal computer processors in Europe. The news triggered selling across the chip sector. Intel rival Advanced Micro Devices slid 80 cents to $9.81, while Applied Materials, which makes equipment used in semiconductor production, fell 30 cents to $20.62. Investors also bid Biogen lower, sending the pharmaceutical company down $5.54, or 11.6 percent, to $42.16, after Biogen reduced its financial estimates for the second quarter and full year, citing difficult market conditions. Among gainers, Boeing rose 80 cents to $42.76, while J.C. Penney advanced 73 cents to $23.33. General Electric climbed 90 cents to $30.20. But investors didn't blindly buy blue chips. American Express fell $1.20 to $39.16 on broader worries that a weak recovery would hurt the financial sector. Reports of more accounting problems also pressured the market. Tyco dropped $4.50, or 30.8 percent, to $10.10 on concerns the company would not shed its lending unit as quickly as expected, and fears that a government investigation of the company's finances is broadening. Standard & Poor's and Moody's Investors Service also reduced their credit ratings on the company. Tyco is the latest in a series of companies to face allegations of wrongdoing, and analysts say investors have lost faith in corporate bookkeeping, and therefore the meaningfulness of positive earnings. The resulting malaise is making it even harder for Wall Street to turn around -- and predisposes the market to selloffs. Disappointing earnings news only intensifies the pressure. "Investors are pretty glum right now. They are concerned that all of the economic stimulus we saw throughout 2001 is not producing the kind of economic response that we were anticipating," said Charles G. Crane, strategist for Victory SBSF Capital Management. "Corporations are really struggling."
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From the Times Business report
From the AP
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