Stocks fall on disappointing earnings, bleak outlooks

Tuesday, April 23, 2002

AP Business WriterNEW YORK (AP) -- A series of earnings disappointments from the likes of DuPont, Exxon Mobil and Earthlink reinforced investors' fears of a prolonged business slump Tuesday, prompting them to sell stocks and send the Dow industrials to their lowest close in eight weeks.

"Investors still lack a catalyst to get the market going. Investors still appear to be somewhat in a state of indifference and uncertainty regarding earnings numbers," said Alan Ackerman, executive vice president of Fahnestock & Co.

The Dow closed down 47.19, or 0.5 percent, at 10,089.24, according to preliminary calculations. The last time the Dow was lower was Feb. 22 when it stood at 9,968.15.

The market's broader indicators also stumbled. The Nasdaq composite index fell 28.38, or 1.6 percent, to 1,730.30, and the Standard & Poor's 500 index declined 6.87, or 0.6 percent, to 1,100.96.

A big factor weighing on stocks, analysts said, is investors' increasing concern that the market is poised to suffer a third straight losing year.

"Investor confidence is down. ... We are two years in this bear market. People's patience is being tested," said Thomas F. Lydon, president of Global Trends Investments in Newport Beach, Calif. "If you look back, usually the best time for the stock market is November through May, and now we are through that."

With few companies sounding upbeat about the second quarter or 2002 overall, investors' hopes for a turnaround in the second half of the year are dimming. And now that most of the biggest companies -- those whose results are most likely to move the market -- have released earnings, there's not much chance for an earnings-inspired rally.

Among Tuesday's losers, Dow industrial DuPont fell $1.51 to $44.84 after missing first-quarter earnings expectations by a penny a share.

Exxon Mobil, also a Dow stock, declined 50 cents to $41.35 on first-quarter profits that were 8 cents a share shy of analysts' estimates.

While first-quarter results have come in about as the market expected, investors are disappointed the most by corporate outlooks, which remain bleak.

Prospects of poor results weighed on certain stocks Tuesday, including Earthlink, which tumbled $1.58 to $7.95 after lowering its second-quarter and yearly forecasts. The company also posted a first-quarter loss that was 2 cents wider than Wall Street had expected.

And, Ericsson fell 25 cents to $2.49, the day after announcing it was cutting up to 17,000 jobs, about 20 percent of its work force, and warning that it won't be profitable this year.

Tuesday's earnings-related winners included Gillette, which rose $1.47 to $36.32 after beating forecasts by 2 cents. Lockheed Martin climbed $3.08 to $62.20 on earnings that surpassed estimates by 3 cents.

Declining issues narrowly outnumbered advancers 16 to 15 on the New York Stock Exchange. Volume was moderate.

The Russell 2000 index, which tracks the performance of smaller company stocks, slipped 0.64, or 0.1 percent, to 510.29.

Overseas, Japan's Nikkei stock average finished Tuesday up 0.1 percent. In Europe, Britain's FT-SE 100 fell 0.6 percent, Germany's DAX index declined 0.3 percent, and France's CAC-40 inched up nearly 0.1 percent.

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