Disappointing corporate news frustrates Wall Street
A change in business strategy at Tyco and lacklustre earnings at other companies stymied Wall Street today and left stocks barely changed following some wide price swings.
The Dow Jones industrials dipped below the 10,000 level for the first time in two months before recovering in late trading.
Analysts said the market, which had bet that earnings would be strong enough to trigger a market turnaround, was resigning itself to the likelihood that 2002’s recovery will be less robust than hoped. Still, a last-minute surge of buying saved the market from extending what had been a weeklong downturn.
‘‘The path of least resistance right now is still down,’’ said Christopher Wolfe, equity market strategist for JP Morgan Private Bank. ‘‘There’s not a lot of catalysts, not a lot of expectations that the market is going to go up any time soon.’’
The Dow closed up 4.63, virtually unchanged, at 10,035.06, despite spending most of the session below 10,000 and falling as much as 103 points early in the session. The index last closed below the psychologically important level on February 22, when it stood at 9,968.15.
Broader stock indicators also showed little change by the end of the day. The Nasdaq composite index rose 0.36 to 1,713.70, just enough to end a six-session losing streak. The Standard & Poor’s 500 index lost 1.66, or 0.2%, to close at 1,091.48.
Tyco fell dlrs 5.15, or 19.9%, to dlrs 20.75 after the conglomerate backed away from plans to split the company into four parts and announced it would close 24 factories and shed 7,100 jobs, primarily in its electronics and telecommunications businesses.
General Mills fell dlrs 3.77, or 7.7%, to dlrs 45.30 on reports that the food company had cancelled a meeting with investors. Dow Jones News reported that the meeting, which was said to have involved Goldman Sachs, was originally scheduled for Friday.
A spate of mediocre earnings reports exacerbated Wall Street’s moodiness.
Investors bid Dow Chemical down 30 cents to dlrs 30.70 on lower than expected first-quarter estimates. Eastman Kodak dropped 76 cents to dlrs 33.18 after announcing a 74% drop in first-quarter profits and beating Wall Street’s lowered forecasts.
The Labour Department reported today that US workers’ wages and benefits grew in the first quarter at the slowest rate in three years a reflection of the effect the sluggish economy has had on employee pay. Another report showed fewer Americans filed new claims for state unemployment benefits last week, suggesting some laid-off workers are finding jobs.
The market had little reaction to the numbers.
Advancing and declining issues traded nearly evenly on the New York Stock Exchange. Volume totalled 1.51 billion shares, compared with 1.35 billion shares on Wednesday.
The Russell 2000 index gained 1.53 to 508.85.
