U.S. Stock Indexes End Lower With Declines Led By Technology
NEW YORK (MarketWatch) -- U.S. stocks on Tuesday sank under the weight of missed earnings reports and bleak forecasts, including those from Texas Instruments Inc. and Sun Microsystems Inc., spurring investors to pummel the technology sector the hardest.
The stock indexes briefly scaled back declines after word the Lehman Brothers credit default swaps settlement was completed with no major fallout, but then quickly reverted to their downward momentum.
The Dow Jones Industrial Average fell 231.77 points, or 2.5%, to 9,033.66.
"If the major averages don't give back more than half of yesterday's gains, that would be a plus. If we don't start up again by tomorrow (Wednesday), the S&P 500 could be vulnerable back to 900," said Elliot Spar, options market strategist at Stifel Nicolaus.
Of the Dow's 30 components, 26 ended lower, with Citigroup Inc. among those weighing on the index. Its shares fell 6% in the wake of a downgrade by Goldman Sachs, which advised clients to sell Citicorp shares. .
Oil giants and Dow components Exxon Mobil Corp. and Chevron Corp. were both down more than 4% as crude futures closed at $70.89 a barrel, down 4.5%.
Also weighing on the Dow, Caterpillar Inc. fell 5.1% after the heavy-equipment maker reported a third-quarter profit decline of 6% from the year-ago period, but held firm to its previous target of $6-a-share profit for 2008.
Chemical giant DuPont slipped 8% after cutting its earnings outlook.
Bright spots on the Dow included American Express Co. , up 8.4% after it reported a smaller-than-forecast 24% profit fall for the third quarter late Monday.
Pfizer Inc. settled unchanged after tripling its third-quarter profit.
Also on the rise, 3M Co. advanced 4.4% after the diversified industrial behemoth reported a third-quarter profit gain of 5.8%. .
The S&P 500 fell 30.35 points, or 3.1%, to 955.05, and the technology-heavy Nasdaq Composite declined 73.35 points, or 4.1%, to 1,696.68.
Gold futures fell as a stronger dollar diminished the precious metal's appeal, with gold for December delivery losing $22 to end at $768 an ounce. .
The dollar came off session highs as risk aversion faded following news of the Lehman credit-default swaps settlement.
The dollar index which tracks the U.S. unit against a basket of six major currencies, was at 83.995, down from a high of 84.263 reached earlier. The euro was buying $1.3127, up from $1.3077 earlier.
Volume on the New York Stock Exchange exceeded 1.1 billion, and decliners topped advancers more than 2 to 1. On the Nasdaq, almost 899 million shares traded, and one stock traded higher for every three on the decline.
Troubled trio
National City corp. , KeyCorp and Fifth Third Bancorp all said before Tuesday's opening bell that they lost money in the third quarter on charges due to bad loans.
Gloomy outlooks pressured Texas Instruments , its shares dropping 6.3%, and prompted downgrades from at least two brokers. .
Sun Microsystems Inc. dropped 17.5% as the network-server firm forecast a bigger loss than analysts had anticipated.
After the close, Yahoo Inc. shares rose following release of lower fiscal third quarter results. It said it expected to cut 10% of global jobs in the fourth quarter.
Apple Inc. is also scheduled to report results.
Shares of Ford Motor Co. declined 6.9% after the holding company for billionaire investor Kirk Kerkorian said it might sell its entire 6% stake in the auto maker as it switches its focus to the gaming and energy sectors. .
Any turn around for Ford could be "five years down the road," according to Marty Padgett, editor of The Car Connection.
Before the opening bell, stock futures had pared declines on word of a new Federal Reserve money-market funding facility. .
On Monday, U.S. equities surged after a key inter-bank lending rate droped and after Federal Reserve Chairman Ben Bernanke endorsed a second stimulus package. The Dow Jones Industrial Average rocketed 411 points, the S&P 500 added 44 points, and the Nasdaq Composite climbed 58 points.
By Kate Gibson