NEW YORK -- Profit-takers rushed back to Wall Street Thursday as disappointing news from International Paper and Duke Energy stirred fears that stocks won't hold gains from their two-week surge. The Dow Jones industrials slid more than 170 points.
Investors shrugged off an encouraging jobless claims report to give up gains from earlier in the session. Analysts said doubt remained about the market's long-term recovery.
"There are a few negative earnings things coming out," said Ed Peters, chief investment officer at PanAgora Asset Management Inc. "But a lot of it I think is profit-taking. The market has come a long way in a short time period, and we can't be certain that's justified."
The Dow Jones industrial average fell 176.93, or 2.1 percent, to close at 8,317.34, according to preliminary calculations, after gaining 44 points Wednesday for its fourth advance in five sessions. Earlier in the day, the blue chips rose as much as 64 points.
The broader market also finished lower. The Nasdaq composite index declined 21.39, or 1.6 percent, to 1,298.66. The Standard & Poor's 500 index dropped 13.64, or 1.5 percent, to 882.50.
The Labor Department reported Thursday that new claims for jobless benefits fell last week by a seasonally adjusted 25,000 to 389,000, the lowest point since Oct. 5. That came after a gain in claims in the previous week, offering investors some hope of an improving job market.
Decliners included Dow components General Electric, which dropped 90 cents to $26, and International Paper, which fell 90 cents to $36.84, on a brokerage downgrade from Prudential.
Duke Energy dropped $1.06 to $19.08 after reporting that third-quarter profit tumbled 71 percent. The company is also cutting 1,500 jobs, citing weakness in the U.S. economy.
Stocks have surged in the past two weeks after the Dow and Nasdaq hit five- and six-year lows. Since Oct. 9, blue chip stocks have gained about 1,200 points, mostly on better-than-expected earnings news, and analysts are hopeful the market can sustain its upward trend.
Still, investors remain concerned about a war with Iraq as well as the strength of the economic recovery. The market also remains vulnerable to bouts of profit-taking, likely leading to uncertain trading, they said.
"This is the way it's going to be for a while," said Tony Cecin, director of institutional trading at US Bancorp Piper Jaffray in Minneapolis. "There are still a lot of nonbelievers that think the rally is not sustainable. It's kind of hit and run. You buy, it goes up a little bit, and then you sell. But overall, I think we're in a positive environment."
Dow Chemical dropped $2.57 to $24.97, despite posting a doubling in third-quarter earnings. The results met expectations.
Microsoft fell $1.97 to $51.23 after the Justice Department said it was investigating whether the software company is hiding details about its Windows operating system from competitors, according to the Los Angeles Times.
Gainers included AOL, which rose $1.02 to $14.55, after the media company reported a small third-quarter profit but said it would restate its financial results for a two-year period.
American International Group climbed $1.11 to $64.16 despite reporting a rise in third-quarter profits that missed expectations.
And AT&T Wireless jumped $1 to $6.45 after the wireless carrier said it had gained 201,000 new subscribers, bringing its total to 20.15 million customers at the end of the quarter. That represented a 17.7 percent increase from last year.
Declining issues outnumbered advancers 15 to 11 on the New York Stock Exchange. Volume was moderate.
The Russell 2000 index, the barometer of smaller company stocks, fell 2.95, or 0.8 percent, to 366.00.
Overseas, Japan's Nikkei stock average finished lower 1.2 percent. In Europe, Germany's DAX index was up 2.5 percent, France's CAC-40 rose 2.8 percent, and Britain's FTSE 100 climbed 2.4 percent.
On the Net:
New York Stock Exchange: http://www.nyse.com
Nasdaq Stock Market: http://www.nasdaq.com
© 2017. All Rights Reserved. | Contact Us