Wall Street sinks to new low for yearnews.ft.com/cms/s/92bacc44-ace2-11d9-ad92-00000e2511c8.htmlBy Andrei Postelnicu in New York
Published: April 14 2005 13:52 | Last updated: April 14 2005 21:37
Wall Street indices reached new lows for the year on Thursday, breaking through some key technical levels and increasing the chances that further selling may be ahead.
The Dow Jones Industrial Average closed 1.2 per cent lower at 10,278.75, while the S&P 500 index lost 1 per cent to 1,162.04. The Nasdaq Composite index was 1.4 per cent lower at 1,946.71.
All three main indices hit new 2005 lows and the Dow industrials fell below their 200-day moving average for the first time in almost six months. Traders have cautioned that a failure by the main indices to stay above their lows for the year could accelerate losses in a market that has struggled to find reasons to build lasting gains.
The quarterly earnings season was due to pick up the pace and the expected timid estimates from US companies would offer cold comfort to the bulls. Apple Computer fell 9.2 per cent to $37.26, a day after the maker of iPod digital music players reported strong quarterly profits but disappointed investors with its forecasts.
Among Dow components, General Motors fell 5.9 per cent to $26.66 and Caterpillar lost 3.6 per cent to $85.40.
Advanced Micro Devices shares lost 4.7 per cent to $16.26 following the company’s announcement it would spin off one of its divisions.
UnitedHealth, the insurer, saw its shares edge down 2.1 per cent to $93.91 in spite of a 41 per cent increase in profits that expectations.
Away from earnings announcements, Mentor bounced 7.3 per cent to $37.91 after federal regulators were urged to approve silicone breast implants made by the company.
PepsiCo, the soft drinks and foods group, saw its shares rise 2.8 per cent to $55.14 after it exceeded quarterly earnings expectations.
Among air carriers, Southwest Airlines stayed true to its reputation of stock market darling by reporting above-forecast earnings that defied record oil prices in recent weeks. Its shares put on 1.5 per cent to $14.94.
In the energy sector, Kerr-McGee shares rose 6.7 per cent to $78.90 after the company announced a $4bn share buyback as part of a settlement with Carl Icahn, the billionaire.
JDA Software, however, struck a less upbeat note as it warned of lower earnings for the current quarter. The news sent the stock 13.5 per cent lower to $11.50.
Among financials, Morgan Stanley lost 1.5 per cent to $52.33 as analysts at Merrill Lynch downgraded the stock to “neutral” on concerns about personnel.
Shares in Polo Ralph Lauren eased 3.3 per cent to $37.18 after news that data from its customers had been stolen.
In economic news, the number of first-time applicants for unemployment benefits declined slightly last week, as a four-week moving average of the indicator rose to a four-month high.
