Nervous investors pushed stocks substantially lower yesterday on disappointing earnings from the technology sector. The Dow Jones industrial...
NEW YORK — Nervous investors pushed stocks substantially lower yesterday on disappointing earnings from the technology sector.
The Dow Jones industrial average fell 68.50 to 10,471.47.
Microsoft, one of the 30 Dow stocks, slipped 12 cents to close at $25.86 a share. Boeing, also a Dow stock, fell 51 cents to $50.90.
Broader stock indicators also lost ground. The Standard & Poor’s 500 index was down 9.22 at 1,175.41, and the Nasdaq composite index dropped 27.71 to 2,045.88.
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Investors were troubled as perennial market favorite eBay missed its earnings target for the fourth quarter and said its outlook for the current quarter was lower than expected. Three brokerage firms lowered their ratings on the online auctioneer. Cellphone maker Qualcomm likewise issued a disappointing profit forecast.
eBay tumbled $19.72, or 19 percent, to $83.33 after missing Wall Street profit forecasts by a penny per share in earnings reports Wednesday. The company drew immediate criticism from analysts after posting a 2005 outlook that, while still very solid, was less than expected.
The pressure from tech shares siphoned momentum from Citigroup’s strong earnings, and investors also shrugged off reports of merger talks between Federated Department Stores and May Department Stores.
In the face of other uncertainties — the upcoming Iraqi elections, OPEC’s meeting Jan. 30 and ongoing concern about inflation — the market will likely continue to give ground should earnings disappoint, analysts said.
“I think you’ve got all these things that have snowballed and are prompting people to pull chips off the table,” said Scott Wren, equity strategist for A.G. Edwards & Sons. “We have a nice, modest, sustainable kind of economic environment that stocks perform pretty well in, but we have to get past some of these things first.”
In economic news, the Conference Board’s Index of Leading Economic Indicators rose 0.2 percent in December, with November’s rise revised to 0.3 percent. The index is designed to measure future economic activity.
“When you see economic figures like this, it puts the past few weeks in its proper perspective,” said Rod Smyth, chief investment strategist at Wachovia Securities. “We’re in a correction right now from the rise we saw since mid-October. It’s perfectly natural for markets to behave this way.”
That correction has nearly wiped out all the Nasdaq’s gains from the fourth-quarter rally, while denting the advances made by the Dow and S&P 500.