Dow Takes A Nosedive

Weak Quarterly Profits From DuPont And American Express Send Stocks Sharply Lower

(CBS/AP) 
A steady flow of lackluster earnings reports dictated the glum mood on Wall Street.

DuPont and American Express both sank after their earnings reports. DuPont tumbled $3.36, or 6.3 percent, to $49.90, while American Express dropped $3.49, or 5.4 percent, to $61.17.

McDonald's Corp., the world's largest restaurant chain, posted a loss after taking a charge for the sale of its Latin American outlets. Excluding that charge, it reported earnings per share that matched Wall Street expectations. The Dow stock fell 95 cents to $51.55.

Dow component AT&T reported a 61 percent increase in second-quarter earnings, lifted primarily by its buyout of BellSouth Corp. At the same time, the telecommunications company reported fewer activations of Apple Inc.'s iPhone than analysts expected when the much-touted device debuted just before the quarter's end.

AT&T shares fell 35 cents to $39.68, while Apple's stock dropped $8.81, or 6.1 percent, to $134.89. Apple is scheduled to report quarterly results on Wednesday.

In what is perhaps a signal to Wall Street of more woes to come in the mortgage lending market, Countrywide Financial posted sharply lower second-quarter profit and slashed its earnings forecast as mortgage banking earnings were cut in half. Its shares declined $3.56, or 10.5 percent, to $30.50.

The largest U.S. mortgage lender is used as one of the barometers of the housing industry, which has continued to slump amid delinquencies and defaults in subprime loans, or those made to borrowers with weak credit.

The troubles among subprime mortgage lenders have periodically rattled Wall Street this year, leading to sudden plunges as investors feared that the sector's problems would spread to other parts of the economy. The market has generally recovered in a short period of time, but as Tuesday's trading showed, it remains vulnerable to any bad news about mortgages or housing.

Investors received some positive earnings news after the market close: Amazon.com Inc. said second-quarter profit more than tripled on robust online sales of books, music and electronics. The stock ended the regular session down $2.49, or 3.5 percent, at $69.25, then jumped in after-hours electronic trading.

Meanwhile, oil prices receded further from last week's 11-month highs. Light, sweet crude gave up $1.33 to end at $73.56 on the Nymex. Gasoline futures fell.

The Russell 2000 index of smaller companies dipped 23.76, or 2.84 percent, to 811.86.

Overseas, Japan's Nikkei stock average fell 0.21 percent. Britain's FTSE 100 dropped 1.90 percent, Germany's DAX index fell 1.73 percent, and France's CAC-40 fell 1.69 percent.

[r9119111]

"DuPont Co. was the Dow's biggest loser after the chemical maker reported its second-quarter profit growth was flat, as improving sales abroad balanced the ongoing weakness in the U.S. ..."

Hmmm, improving sales abroad despite weakness in the US... must be Global. Anyone else feel the US is being tossed like an empty can of cola?
Posted by hypnotoad72 at 05:16 PM : Jul 24, 2007

I do.

[noaanhc]

The rich get richer.

Well at least for today
they got a little poorer

[strewthmate]

the bigger the bubble, the bigger the bang when it bursts

[shanev137]

so much drama in the dow for the media to hype.

[fascistusa]

Ever factor in the the Dollar keeps losing its value?

ZEITGEISTmovie.com.

The Federal Reserve and the Corporate Fascist Media is how the Elite RULE our Country.

"The Land of the FREE!!!!"

[feelfree1]

vet999999,

Re: "Wall Street is supposed to be the rectal thermometer for the economy"

That really paints a picture!

What a perfect ANALogy!

The wheels are beginning to come off of the trickle-down, smoke-n-mirror, war/fraud-based economy.

Maybe this will wake a few more people up.

[vet999999]

Wall Street is supposed to be the rectal thermometer for the economy, not the other way around. It has evolved into nothing more than an extension of Las Vegas. Too emotional, not enough real business sense. If you look at corporate earnings, a major portion of the reported earnings come from investing their multi billion dollar retirement funds, not from actually delivering the goods and services their companies are known for.

[hypnotoad72]

I should have read more of the article in advance:

"DuPont Co. was the Dow's biggest loser after the chemical maker reported its second-quarter profit growth was flat, as improving sales abroad balanced the ongoing weakness in the U.S. ..."

Hmmm, improving sales abroad despite weakness in the US... must be Global. Anyone else feel the US is being tossed like an empty can of cola?

[hypnotoad72]

Earnings will continue to drop when fewer can afford their products. How low can prices go?

And are these figures tied into America's economy, or the Global Economy?