- Two men face charges in Cape prostitution sting (5/28/17)
- Former coroner convicted of felony theft now faces prison in misdemeanor case (5/23/17)2
- Police: Woman arrested after meth found hidden in pants (5/26/17)4
- Woman may lose foot after being hit by moped (5/24/17)
- Illinois Trail of Tears site where Cherokee buried named to National Historic Register (5/24/17)
- Business notebook: Woman, sister-in-law buy Perryville custom-wear shop (5/22/17)
- Police apprehend Charleston man they say hit Cape woman with car (5/24/17)
- Rabies confirmed in Cape County after person bitten by bat (5/26/17)
- Man with prior sex convictions charged with abuse of a child 10 years ago (5/25/17)2
- New features at Cape Splash geared for kids; revenue has exceeded costs by more than $200K (5/24/17)1
Stocks fall sharply on GE disappointment, IBM rumors
AP Business WriterNEW YORK (AP) -- Mixed earnings from General Electric and speculation that IBM might be under federal investigation gave Wall Street its worst day in about six weeks Thursday, as already reluctant investors decided to sell rather than risk further losses.
The Dow Jones industrials dropped more than 200 points to their lowest close since Feb. 28, while the Nasdaq composite index ended just above its Feb. 22 finish. The declines were especially striking since they came a day after a broad rally spurred by an encouraging retail report from Sears, Roebuck. Analysts said that until there is solid proof that business is recovering, the market's mood will likely shift daily -- with a bias toward the negative.
"We need some better news on earnings and more clear news on direction and path of the economy," said Charles White, portfolio manager at Avatar Associates. "Until then, I think we're in for more grinding here."
The Dow closed down 205.65, or nearly 2.0 percent, at 10,176.08, according to preliminary calculations, giving back a big 173-point gain Wednesday. It last finished lower on Feb. 28, at 10,106.13.
The losses in broader stock indicators were even steeper. The Nasdaq composite index lost 41.79, or 2.4 percent, to 1,725.28-- just above its Feb. 22 close of 1,724.54.
The Standard & Poor's 500 index fell 26.78, or 2.4 percent to 1,103.69, dropping to its lowest close since Feb. 22, when it closed at 1089.94.
GE dropped $3.45, or 9.3 percent, to $33.75 on first-quarter results that met earnings expectations but fell short of revenue projections. The conglomerate's performance is closely watched because GE has so many different types of businesses, ranging from financial services to manufacturing and industrial operations.
Investors also had second thoughts about the technology sector. IBM fell $4.82, or nearly 5.4 percent, to $84.19 after SEC Insight, a newsletter, said the computer maker was the subject of a federal Securities and Exchange Commission inquiry. A spokeswoman said IBM does not comment on its relationship with government regulators. The losses compounded a decline earlier this week when the bellwether had warned of lower-than-expected revenues.
"People want to be able to count on stocks like GE and IBM, not worry about them," said John Lynch, chief market analyst at Evergreen Investments. "If investors can just sink their teeth into a couple of good earnings stories and conference calls they should be able to regain some comfort as the year progresses. So far, that hasn't happened."
GE and IBM are both Dow components, and their losses contributed significantly to the average's decline, but selling spread beyond the blue-chip average.
Yahoo! tumbled $2.99, or 16.2 percent, to $15.45 despite reporting profits that met expectations. Analysts say investors still question whether the online portal can reduce its dependency on advertising enough to truly turn around.
Intel, which is expected to report results next week, declined 32 cents to $28.94.
Brokerage firm stocks also dropped on fears that a New York state investigation into analyst and investment banking activities would spread and create significant liabilities for the sector. Merrill Lynch, which has been publicly identified as a target of the investigation, slid $4.02, or 7.9 percent, to $46.90.
Even retailers with good news struggled. Target slipped 8 cents to $44.67 despite reporting March sales at stores open at least a year rose 6.8 percent.
Some profit-taking been expected following Wednesday's rally on Sears, Roebuck's better-than-expected earnings and upbeat forecast as investors collected their winnings. But the extent of the losses suggested that Wall Street is starting to question whether a business recovery will be in place by the second half of 2002, as many analysts had predicted.
Although economic data has steadily improved, first-quarter earnings results this month have been uninspiring and few companies have said business is improving. Many investors had been counting on more bullish forecasts to propel stocks higher, but so far that hasn't happened. After two years of losses on the broad market, many on Wall Street have become reluctant to make any big moves without solid proof that their investments will pay off.
Year-to-date, the Dow has gained 1.5 percent, while the Nasdaq has lost 7.1 percent and the S&P is down 1.4 percent.
Declining issues led advancers 2 to 1 on the New York Stock Exchange. Volume came to nearly 1.50 billion shares, ahead of the 1.44 billion traded Wednesday.
The Russell 2000 index 7.57 to 503.73.
Overseas, Japan's Nikkei stock average dropped 0.6 percent. In Europe, Germany's DAX index fell 1.9 percent, while Britain's FT-SE 100 and France's CAC-40 each lost 1.8 percent.
On the Net:
New York Stock Exchange: http://www.nyse.com
Nasdaq Stock Market: http://www.nasdaq.com