Wall Street: Tuesday close
MARKETS closed in the the red for the third straight day as accounting blues once again held the spotlight. The Dow Jones Industrial Average, down 220 points on Monday, finished off 1.66 points to 9,685.43 after fluctuating within a 170 point range. The Nasdaq Index, which lost 3% on the first trading day of the week, slid 17.01 points or 0.92% to 1,838.52, its lowest close since November 12.
Nagging concerns about whether company profits are all they are cracked up to be continued to weigh on investor sentiment. Tyco International, which has lost $60bn. in market value since 1 January, plunged another $6.80 or 23% to $23.10. Elan, the Irish pharmaceutical company, dropped 86 cents or 2.3% to $29.86 after losing half its value on Monday.
Energy company Williams stumbled another $1.83 or 14.3% to $6.97. WorldCom lost $1.16 or 14.3% to $6.97. JP Morgan, the bank some analysts say could suffer the most from loans outstanding to companies under a cloud, dropped $1.54 or 5% to $29.02.
A flight to safety out of shares was apparent on a major scale for the first time as gold leapt to $299 an ounce, a two-year high. Newmont was among gold miners on the move, rising $1.17 or 4.9% to $25.07.
Jeffrey Immelt, chief executive and chairman of General Electric tried to put down speculation about its accounting by forecasting that it would have a strong quarter. Immelt, who took over recently from Jack Welch as chairman and chief executive of the conglomerate, said that after only five weeks of the new quarter, he was confident GE would meet or exceed its double digit profit projections.
GE 'isn't a faith company - it's a performance stock,' Immelt said. GE's shares, hammered 5% on Monday on fears that its complex accounting could come under scrutiny in the wake of Enron's collapse, regained $1.21 cents or 3.5% to $36.21.
The Dow was steadied to some degree by the strong performance of components Honeywell and United Technologies, which will benefit from President Bush's just announced defence budget. Honeywell shares rose 69 cents or 2.2% to $32.76 and United Technologies gained 38 cents or 0.6% to $67.37.
The wireless telephone sector was knocked by a bearish report from Sprint PCS, the fourth biggest American provider. Shares in Sprint PCS slumped $2.77 or 20% to $10.99. AT&T Wireless, down 34 cents or 3.4% to $9.78, and Nextel, off $1.73 or 26% to $5.05, fell in sympathy.
Optical network equipment maker Ciena rained on tech's parade by warning that it was having a hard time of it and would cut 400 jobs or 12% of its workforce. Ciena shares slid $1.12 or 11% to $9.
