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Markets red after war Original Source Link: (May no longer be active)
http://biz.yahoo.com/cbsm-top/030409/526f0ffac644b3c5e4438f4a94dd6ae4_1.htmlhttp://biz.yahoo.com/cbsm-top/030409/526f0ffac644b3c5e4438f4a94dd6ae4_1.html
CBS MarketWatch
Stocks move off lows but stay red
Wednesday April 9, 3:20 pm ET
By Susan Lerner
NEW YORK (CBS.MW) -- Stocks moved off their lows late Wednesday but remained in the red as worries about the outlook for the economy and corporate profits drew Wall Street's attention away from the war.
Pictures of Iraqis cheering coalition forces in the center of Baghdad had sparked an early rally but losses set in as post-war concerns took center stage.
"I expect the enthusiasm (over war events) could continue for a while but at some point we will come back to reality and the enthusiasm will have to mesh with the corporate picture and sort out how earnings are shaking out and I don't think anybody expects corporate earnings to do terribly well here this quarter," said Andy Brooks, vice president and head stock trader at T. Rowe Price.
At last check, the Dow Jones Industrials (CBOT:^DJI - News) were down 28 points, or 0.3 percent, to 8,271, the Nasdaq Composite Index (NasdaqSC:^IXIC - News) shed 14 points, or 1 percent to 1,369 and the S&P 500 (CBOE:^SPX - News) lost 4.4 points, or 0.5 percent, to 874.
With Saddam Hussein's whereabouts unknown, U.S. Marines helped Iraqis in downtown Baghdad destroy a concrete symbol of the regime: a giant statue of the ruler that stood over the capital's central square. Other units seized the strategic Rasheed Airport in the capital city while fighting continued in other areas of the city, notably near the main university campus. See full report on the war.
McDonald's (NYSE:MCD - News) , Microsoft (NasdaqNM:MSFT - News) , AT&T (NYSE:T - News) , Home Depot (NYSE:HD - News) and Hewlett-Packard (NYSE:HPQ - News) , American Express (NYSE:AXP - News) and General Electric (NYSE:GE - News) were the biggest losers among the blue chips.
Altria (NYSE:MO - News) , Honeywell (NYSE:HON - News) , Boeing (NYSE:BA - News) and United Technologies (NYSE:UTX - News) , and General Motors (NYSE:GM - News) and Disney were the only Dow gainers.
Advancers led decliners 1,713 to 1,440 on the New York Stock Exchange and 1,657 to 1,271 on the Nasdaq. Volume was on the light side came in at about 860 million shares on the Big Board and just over 900 million shares on the Nasdaq.
On the New York Mercantile Exchange, crude for May delivery traded at $28.05 a bar up 5 cents to $28.05 a barrel, while June gold futures rose $1.30 to $324.20 an ounce. See Futures Movers.
Gold, natural gas and oil services were the only sectors moving higher. Retailers, banks, software, chemicals and paper & forest products were the worst performing groups.
Earnings watch
Wall Street is paying closer attention to the state of post war economy and the quality of corporate earnings, especially following the recent spate of profit warnings. Six S&P 500 companies scheduled to report Wednesday.
Edward Kerschner, investment strategist at UBS Warburg told clients Wednesday he expects first quarter earnings for the S&P 500 should be in line or above his $11.55 a share estimate, but said his full-year forecast of $50 a share is at risk unless the U.S. economy "rebounds fairly soon and accelerates in the second half of 2003."
For the first quarter, Kerschner said the sectors where negative earnings surprises seem most likely are commodity producers, transportation, machinery, hotels and media. In line or positive surprises are most likely in the energy, homebuilding, housing finance, financial, consumer non-durables and healthcare sectors.
Mixed results
Wednesday's news on the earnings front was mixed.
NCR Corp. rallied 11 percent after the maker of automated teller machines and retail systems said it expects its financial results for the first quarter to exceed Wall Street's expectations. The company is forecasting a loss of less than 30 cents per share on revenue of roughly $1.23 billion in the period. Analysts polled by Thomson First Call were looking for a loss of 48 cents per share, on average.
Abbott Laboratories (NYSE:ABT - News) posted first quarter net earnings of $801 million, or 51 cents a share, in line with the average analyst estimate compiled by First Call. Looking ahead, the drug maker expects to earn 51 to 53 cents a share in the second quarter and $2.20 to $2.25 for the year, versus analyst expectations of 53 cents and $2.21, respectively. Abbott shares added 42 cents to $40.35.
Homebuilder M.D.C. Holdings (NYSE:MDC - News) reported first-quarter net income of $37 million, or $1.36 a share, above the average analyst estimate compiled by Multex of $1.31 a share. Revenue increased 25 percent to $570 million, versus analyst expectations of $540.5 million. MDC climbed 1.5 percent to $42.35.
German automaker DaimlerChrysler (NYSE:DCX - News) said it was sticking to its target for 2003 to increase operating profits, excluding one-time effects but that it has become "much more difficult to reach the targets we have set ourselves." Jürgen E. Schrempp, chairman of the board of management said the first quarter of 2003 was "encouraging" and that the carmaker' Mercedes Car Group "had a good start to the year 2003." DaimlerChrysler shares moved up 1.7 percent to $32.95.
But Dun & Bradstreet (NYSE:DNB - News) warned that it would fall short of current profit and revenue projections for the first-quarter. DNB shares tumbled 12 percent to $34.69.
And Stanley Works was down more than 9 percent after the tool maker said first-quarter and full year results would fall short of expectations and announced plans to lay off roughly 1,000 employees as part of a restructuring initiative designed to improve margins.
After Tuesday's closing bell, Knight Ridder (NYSE:KRI - News) said it expects first-quarter net income to be "slightly" better than last year's first quarter total of 60 cents a share. Analysts polled by Thomson First Call had been anticipating a profit of 67 cents. The company said ad sales have been negatively impacted by the U.S. war in Iraq. Knight Ridder shares fell $1.48 to $58.88. See Media Stocks.
Still ahead
Ahead of its quarterly report due after the closing bell, Yahoo fell 3.7 percent to $22.92 Wednesday. The First Call consensus estimate calls for the Internet services provider (NasdaqNM:YHOO - News) to report earnings of 6 cents a share for the first quarter.
Genentech is also slated to report after the close. The No. 2 biotech firm (NYSE:DNA - News) is expected to earn 28 cents per share, according to the average estimate of analysts polled by Multex. Genentech shares edged up 12 cents to $36.86 ahead of the report
Focus on Microsoft
Microsoft was on the mind of analysts Wednesday but their outlooks for the software giant conflicted.
Analyst Drew Brosseau at SG Cowen upgraded the stock to "outperform" from "market perform" ahead of an upcoming new product cycle that will kick off on Apr. 24.
Although he doesn't expect the product rollouts to drive "material" changes to his 2003 to 2004 estimates, he thinks they could bolster investor perceptions about Microsoft's growth prospects and competitive position, as well as strengthen the potential for some modest upside to expectations.
But analyst Rick Sherlund at Goldman Sachs said he expects Microsoft's management to be "cautious" about its outlook for fiscal 2004, given that the results will be "much more dependent on the underlying pace of PC demand."
Meanwhile, SoundView Technology said it expects the company to post quarterly results in line with forecasts but the firm remains concerned about growth catalysts for 2003 and 2004 but that it is unlikely Microsoft will outperform the broader technology market.
Microsoft shares slid 2.3 percent to $25.00.
Sell-side action
In other analyst action, Motorola was downgraded at Needham & Co. on questions about the strength of the company's handset business given a recent warning from communications chipmaker RF Micro Devices and an excess supply of handsets in China.
Motorola shares (NYSE:MOT - News) fell 3.8 percent to $8.00.
Meanwhile, AT&T fell to a level not seen since the mid-1980s after CS First Boston lowered its 2003 earnings and revenue estimates for Ma Bell to $1.53 a share and $34.6 billion, respectively, from $1.77 and $35.1 billion and also cut its price target on the stock to $18 from $27. AT&T shares recently changed hands at $14.78, down 33 cents.
Separately, AT&T said Wednesday afternoon that it was streamlining its management structure, resulting in "some" job eliminations and changes.
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