Reuters: Stocks slide as warnings weigh on techs

NEW YORK (Reuters) – U.S. stocks fell on Wednesday, with technology shares sliding after some companies said they would miss analysts’ quarterly earnings forecasts.
Shares of network infrastructure company ADC Telecommunications Inc. and software maker Mercury Interactive Corp. were lower after the companies said they expected to miss Wall Street’s expectations.
The Dow Jones industrial average was down 55.30 points, or 0.53 percent, at 10,385.81. The Standard & Poor’s 500 Index was down 9.51 points, or 0.78 percent, at 1,204.96. The technology-laced Nasdaq Composite Index fell 21.99 points, or 1.03 percent, to 2,117.37.
“There is probably a higher level of uncertainty about how this earnings season is going to play out than in any other earnings season in a long time,” said Hugh Johnson, chief investment officer at Johnson Illington Advisors in Albany, New York. “There are a lot of tight stomachs when it comes to looking at earnings season.”
The major indexes also retreated after a report from the Institute for Supply Management that its services index fell to 53.3 in September, down from 65 in August and well below the median Wall Street forecast of 61. Any number above 50 indicates growth.
The U.S. Energy Information Administration reported that crude inventories declined 300,000 barrels last week. Economists polled by Reuters had expected a 100,000 barrel drop.
U.S. light crude oil futures were unchanged at $63.90 a barrel.
ADC forecast quarterly earnings from continuing operations would fall below analysts’ expectations. Its shares plunged 17.5 percent to $18.71 on the Nasdaq.
Mercury said it expects third-quarter revenue to fall short of its previous target and Wall Street forecasts. The software maker’s shares fell 13.6 percent to $31.89 on the Nasdaq.
Other declining tech shares included Microsoft Corp. off 12 cents at $24.86 and Apple Computer Inc., down 47 cents to $53.28. Both trade on Nasdaq.
Among economically sensitive blue-chip stocks, shares of heavy-equipment maker Caterpillar Inc. were down 1.9 percent at $56.65 and airplane manufacturer Boeing Co. was off 1.2 percent at $67.17. Both trade on the New York Stock Exchange.

Posted by on October 5th, 2005 at 1:11 pm


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