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January market drop worst since 1982 Original Source Link: (May no longer be active)
http://quote.bloomberg.com/apps/news?pid=10000006&sid=agofyWpCby_c&refer=homehttp://quote.bloomberg.com/apps/news?pid=10000006&sid=agofyWpCby_c&refer=home
U.S. Stocks Fall on Oil Prices; Dow Average Erases 2004 Advance
Jan. 21 (Bloomberg) -- U.S. stocks fell, wiping out the Dow Jones Industrial Average's 2004 gain. Higher oil prices and a drop in consumer confidence overshadowed better-than-expected earnings from General Electric Co. and United Technologies Corp.
Benchmark indexes recorded a third week of losses, extending their 2005 slump, as disappointing forecasts from companies including EBay Inc. and Qualcomm Inc. renewed concern that profit growth may slow more than anticipated.
``The oil market put a damper on things,'' said Robert Drust, managing director of listed trading at Wedbush Morgan Securities in Los Angeles. ``The psychology is, `I'd rather be selling stocks these days instead of jumping in.' January can set the tone'' for the year, he said.
The Dow average retreated 78.48, or 0.8 percent, to 10,392.99. The Standard & Poor's 500 Index fell 7.54, or 0.6 percent, to 1167.87, paced by Delta Air Lines Inc. as rising fuel costs threaten to widen its losses. The Nasdaq Composite Index declined 11.61, or 0.6 percent, to 2034.27.
Four stocks were down for every three that were up on the New York Stock Exchange. Some 1.6 billion shares changed hands on the Big Board, 11 percent more than the three-month average.
The Dow average has dropped 3.6 percent this year after gaining 3.1 percent in 2004. The benchmark fell 1.6 percent this week, while the Nasdaq slid 2.6 percent. The last time they started a year with three weeks of declines was 1982.
Since last Friday, the S&P 500 lost 1.4 percent and is now down 3.6 percent in 2005. The S&P 500 is headed for its worst January since 2000, a year in which the index fell 10 percent.
Crude oil for March delivery advanced 2.6 percent to $48.53 a barrel in New York, the highest since Nov. 30. Freezing weather in the U.S. Northeast increased consumption of heating fuels and violence in Iraq disrupted oil shipments.
A private report that showed consumer confidence fell for the first time in three months also weighed on share prices. The University of Michigan's preliminary consumer sentiment index slid to 95.8 from 97.1 in December, reflecting waning optimism about the future course of the economy.
GE fell 24 cents to $35.13 after earlier rising to $35.83 following its earnings announcement.
The world's No. 1 company by market value had fourth-quarter net income of 51 cents a share, beating the 50-cent average analyst estimate in a Thomson Financial survey. Acquisitions and demands for engine parts and loans drove the biggest sales gain in four years.
United Technologies, the maker of Pratt & Whitney jet engines, gained 30 cents to $100.08, retreating from its advance to $101.64. The company said net income last quarter rose to $1.29 a share from $1.16 a year earlier. Analysts expected $1.27.
Out of the 114 S&P 500 companies that have reported fourth- quarter results, about 66 percent beat analysts' estimates, 17 percent missed and 18 percent matched, according to Thomson. Based on average figures since 1994, 59 percent of the companies typically exceed expectations, while 20 percent trail and 21 percent are in line, said Thomson.
About 15 percent of the S&P 500 companies released results this week. Next week will be the busiest period of the quarterly reporting season, with about a third of the benchmark's members scheduled to report.
Earnings growth in the final three months of 2004 probably slowed to an average of 16.5 percent, according to analysts surveyed by Thomson, compared with 16.8 percent in the preceding quarter. Profit growth this year may ease to an average 10.3 percent from 19.3 percent in 2004, said Thomson.
EBay, the No. 1 Internet marketplace, said this week that 2005 profit may miss analysts' estimates. Its shares rose $2.72 to $86.05, rebounding from yesterday's 19 percent slide.
Qualcomm, which makes chips that run mobile phones, said on Jan. 19 that quarterly profit will fall for the first time in three years on rising research costs and a slowdown in semiconductor sales growth. The stock added 2 cents to $37.80, trimming its decline this week to 10 percent.
The Amex Airline Index fell 3.6 percent with all 10 of its members retreating. Delta slumped 37 cents to $5. Shares of the No. 3 U.S. carrier tumbled 16 percent in the past two days after it announced a wider-than-expected quarterly loss. AMR Corp., the parent of American Airlines, slid 34 cents to $8.34.
In other markets, the U.K.'s FTSE 100 Index gained 2.50, or 0.1 percent, to 4803.30; France's CAC 40 Index added 11.75, or 0.3 percent, to 3854.19; Germany's DAX Index fell 6.73, or 0.2 percent, to 4213.70; and Japan's Nikkei 225 Stock Average declined 46.40, or 0.4 percent, to 11,238.37.
Last Updated: January 21, 2005 17:18 EST
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