The Dow Jones industrials fall nearly 108 points, as investors see few bright spots on the horizon.
By Associated Press
Published October 23, 2004
NEW YORK - Worried investors sent stocks tumbling Friday as crude oil futures topped $55 per barrel and tepid earnings from Microsoft Corp. and the Coca-Cola Co. offset Google Inc.'s strong third-quarter report. The Dow Jones industrials fell nearly 108 points, while the Nasdaq composite index dropped 2 percent. The major indexes finished the week mixed.
Oil prices again pressured the market, casting doubt not only on fourth-quarter earnings, but on the health of the economy as a whole. A barrel of light crude was quoted at $55.17, up 70 cents, on the New York Mercantile Exchange.
"These oil prices are really going to bite the consumer at some point. Heating oil is up, it's supposed to be a very cold winter in the Northeast, and lower- and middle-income people are going to pay," said Russ Koesterich, U.S. equity strategist at State Street Corp. "Combine that with a total lack of fundamentals in the big name stocks, and there are very few places left to hide for investors."
Shares of Google surged in early trading as the online search giant doubled revenues and profits from a year ago. Like its initial public offering two months ago, Google was one of the few bright spots in an otherwise depressed market.
The Dow Jones industrial average fell 107.95, or 1.1 percent, to 9,757.81, setting a new low for the year and posting its lowest reading since Nov. 24.
Broader stock indicators also were substantially lower. The Nasdaq composite index lost 38.48, or 2 percent, to 1,915.14, its biggest one-day drop since Aug. 6. The Standard & Poor's 500 index was down 10.75, or 1 percent, at 1,095.74, its lowest close since Aug. 23.
The Dow and S&P 500 lost ground for the third straight week, as the continued rise in oil prices and middling earnings reports again sapped confidence from investors. A wait-and-see attitude pervaded the market, with major economic reports, including the first reading of the third quarter's gross domestic product, and the presidential election looming.
However, the Nasdaq managed a slim gain as technology earnings outpaced those of other sectors.
Google's earnings impressed analysts, with Prudential raising the company's target stock price to $200 early Friday. Google skyrocketed $23.05, or 15.4 percent to $172.43, but other major technology stocks stole any momentum Google might have generated.
"You've got one darling here surrounded by a bunch of less-than-hopefuls, and that's not going to boost anything other than the darling," said Bryan Piskorowski, market analyst at Wachovia Securities. "With oil up and nobody really stepping out with earnings other than Google, we're sliding here."
Dow component Microsoft slipped 82 cents to $27.74 after beating Wall Street estimates by 2 cents per share before one-time charges. Analysts were concerned about a dropoff in long-term contract revenues, a possible sign that demand for the company's software was waning as companies waited for a long-delayed update of the Windows operating system.
Online retailer Amazon.com Inc. missed its third-quarter earnings forecasts by a penny per share, even as the company saw its profits triple from a year ago. A disappointing 2005 sales outlook further disappointed investors. Amazon.com tumbled $4.87, or 12.3 percent, to $34.60.
Coca-Cola, also a Dow component, slid 58 cents to $38.90 after posting a 24 percent drop in quarterly profits on flat revenues. However, the soft-drink giant managed to beat reduced Wall Street estimates by 3 cents per share.
