The Wall Street Journal-20080117-Stocks Fall on Bumpy Day Amid Mixed Profit News
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Stocks Fall on Bumpy Day Amid Mixed Profit News
A late round of selling sealed a stock-market decline after a back- and-forth session in which jittery investors digested mixed news about corporate profits, oil, and the economy.
The Dow Jones Industrial Average was up more than 112 points at its intraday high but ended down 34.95 points, or 0.3%, to 12466.16, off 6% this year. It was the second straight loss for the blue chips, following a bloody 277-point decline Tuesday.
"The fact that we couldn't hold a rally through the close doesn't bode well for the short term," said floor trader Ted Weisberg of Seaport Securities, a New York stock brokerage. He noted that many people were expecting investors to buy in response to lowered share prices.
Among Dow components, Intel slid 12% after it posted disappointing fourth-quarter results late Tuesday. J.P. Morgan Chase jumped 5.8% after it announced a big drop in fourth-quarter profit but assuaged investors' worst-case fears of mortgage-related surprises to come. Exxon Mobil fell 2.8% due to a drop in crude prices on a surprising rise in U.S. reserves.
The energy news was a mixed blessing. Lower fuel prices may buoy consumers whose spending is a catalyst for corporate profits. But the tepid demand that allowed inventories to build may signal that the economy is already weaker than expected.
The tech-stock-led Nasdaq Composite Index shed 1%, or 23 points, to end at 2394.59, down 9.7% on the year. Oracle's agreement to buy BEA Systems limited Nasdaq's losses, as BEA jumped 19% and Oracle nearly 3%.
Stock declines were tempered by hopes the Federal Reserve will cut its key interest-rate target even before its scheduled meeting at the end of this month to spur economic growth as recession fears are spreading.
"I'm on the page that says the Fed has overplayed the slow and steady hand," said analyst Jon Najarian, of OptionMonster.com, a research firm. He alluded to many traders' belief that Fed policy makers' next move, whenever it comes, will be a half-percentage-point cut rather than the quarter-point increments favored at recent meetings.
In major U.S. market action:
Stocks and bond prices fell. The 10-year note shed 4/32 point, or $1.25 for each $1,000 invested, lifting its yield to 3.714%.
The dollar strengthened, to 107.53 yen, from 106.83. The euro fell against it to $1.4657, from $1.4828.
