Wall Street staggered through another volatile session today, with the Dow Jones industrials bouncing between gains and losses before surrendering in late afternoon and closing with their fourth straight loss.
Tech stocks suffered even sharper losses after AT&T and Lucent issued disappointing earnings reports. And financial stocks were hit hard by questions about bankers’ possible role in the collapse of Enron.
Some stocks, including Dow components, managed to hold on to gains for much of the session. But analysts said that after weeks of selling, there are few incentives to do much buying. With confidence continually eroding due to corporate ethics scandals, most investors are unwilling to make many bets.
The Dow ended the session down 82.24 at 7,702,34, giving it a four-day loss of 840.14.
The Nasdaq composite index, heavily populated by high-tech stocks, dropped 53.67 to 1,228.98. The Standard & Poor’s 500 index, one of the broadest market measures, but one with a sizeable tech representation, fell 21.24 to 798.61; it was the S&P’s first close below 800 since April 1997.
In percentage terms, the Nasdaq had the worst performance, falling 4.2% compared to the Dow’s 1.1% and the S&P’s 2.6%.
Financial stocks slid for a second straight session as a Senate subcommittee investing the Enron collapse prepared to hear testimony from JP Morgan Chase and Citigroup officials.
And The New York Times reported that Citigroup might have completed transactions for Enron in a way that helped Enron conceal its true financial condition. Both institutions have denied any wrongdoing in their handling of Enron business.
Citigroup tumbled dlrs 5.04 to dlrs 27, while JP Morgan lost dlrs 4.44 to dlrs 20.08.
Wall Street was also focused on second-quarter earnings reports.
The already battered telecommunications sector retreated further on discouraging results from two of its most high-profile companies. AT&T fell 72 cents to dlrs 8.80 on a dlrs 12.7 billion second-quarter loss due in part to a drop in the value of its cable TV business. Lucent lost 45 cents to dlrs 1.65 after reporting a quarterly decline of dlrs 7.9 billion on Tuesday and another 7,000 job cuts.
Tech stocks were mixed. Texas Instruments gained 9 cents to dlrs 23.48 after reporting second-quarter results in line with expectations, and releasing a current quarter forecast that also conforms to analyst estimates.
The news was better for consumer products companies.
Personal care products maker Kimberly-Clark rose dlrs 3.01 to dlrs 56.01 after reporting profits slightly ahead of expectations. Investors also rewarded Gillette, which rose dlrs 1.91 to dlrs 30.91, on better-than-expected results following a 26% rise in profits.
Individual stocks have been able to post gains over the past few sessions on generally satisfactory results. But unlike earnings reporting seasons of the past, the good news hasn’t been able to lift the broader market.
Declining issues led advancers 5 to 1 on the New York Stock Exchange Tuesday. Volume was heavy.
The Russell 2000 index of smaller companies slipped 15.12 to 364.53.