NEW YORK (AP) — Stock prices retreated yesterday as investors, worried that fourth-quarter earnings might not meet heightened expectations, decided to cash in some of their recent profits.
Analysts said the selling reflected concerns about whether upcoming earnings reports would justify the market’s recent surge. The anxiety overshadowed Federal Reserve Chairman Alan Greenspan’s comments that the weakening U.S. dollar and disappointing jobs data were not barriers to the economic recovery.
“We’re in earnings season so that’s completely dominating what most market watchers are looking at,” said Brian Bruce, director of global investments, PanAgora Asset Management Inc. in Boston. “They want to see no disappointments.”
The Dow Jones Industrial Average closed down 58.00, or 0.6 percent, at 10,427.18.
Broader stock indicators also fell. The Standard & Poor’s 500 index slipped 6.01, or 0.5 percent, to close at 1,121.22, and the Nasdaq Composite Index lost 15.34, or 0.7 percent, to 2,096.44.
Trading has been uneven so far this week as the market waits for earnings news. Analysts said investors are particularly nervous about technology stocks, which have produced some of the most significant gains even as the number of new jobs fell far short of expectations in December and the U.S. dollar continued to lose ground against the euro.
Intel Corp.’s earnings report, expected today, was anxiously awaited by investors looking for signs that the upswing in technology stocks is sustainable. The Nasdaq Composite Index, which has a large technology component, has been trading at levels not seen in two years, and not everyone is convinced that the valuations are warranted.
“If Intel has a hiccup, it could burst this whole bubble on tech, at which point the whole rally could fall off,” said Bill Groenfeld, head trader for vFinance Investments. “If it does well, then we can reassess where we are and we can take off again.”
Intel finished down 56 cents at $33.59 in selling that extended to other technology stocks. Yahoo Inc. slipped 94 cents to close at $48.80.
Wall Street’s anxiety was heightened by mixed earnings reports in the banking sector. Shares of BB&T Corp. closed down $1.16 at $36.63 after the North Carolina bank reported fourth-quarter earnings in line with expectations, but warned that profit growth in 2004 would be slower because of soft demand for commercial loans.
Investors also sent AmSouth Bancorp lower despite earnings that met expectations. The stock dropped 24 cents to $24.30.
Also yesterday, drug maker Abbott Laboratories Inc.’s plan to purchase TheraSense Inc. in a $1.2 billion cash deal to bolster Abbott’s diabetes portfolio sent TheraSense surging 31 percent higher, ending the session up $6.34 to $26.64. Abbott finished up 24 cents at $44.43.
Declining issues led advancers nearly 5 to 4 on the New York Stock Exchange. Volume on the floor of the Big Board came to 1.55 billion shares, up from 1.47 billion in Monday’s session.
The Russell 2000 index of smaller companies closed down 1.85, or 0.3 percent, at 581.16.
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