Dow bank withdrawal Profit warning from J.P. Morgan
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Thu Dec 14 13:59:26 MST 2000
Dow bank withdrawal Profit warning from J.P. Morgan drags blue chips
down; Nasdaq pressured
December 14, 2000: 10:27 a.m. ET
NEW YORK (CNNfn) - The Dow Jones industrial average tumbled Thursday
morning as investors turned their attention to the latest round of
bottom line warnings, led by merging financial services partners Chase
Manhattan and J.P. Morgan.
The Nasdaq composite index also declined.
"All the bad news is not out yet, and I don't know if we're going to
have another round of estimate reductions because the economy seems to
be falling away far faster than any of us would expect," Vince Farrell,
chief investment officer at Spears, Benzak, Salomon & Farrell, told
CNNfn's Ahead of the Curve.
The day's data appeared to have little impact on the markets. The
Producer Price Index, a measure of the price of goods at the wholesale
level, came in line with expectations -- another sign that the Federal
Reserve may temper its stance on inflation at its next monetary policy
making meeting on Dec. 19.
Investors may have breathed a sigh of relief that the presidential
election is finally over, but acted little on the news. More than five
weeks after Americans went to the polls, Vice President Al Gore conceded
Wednesday night to Texas Gov. George W. Bush.
Just before 10:40 a.m. ET, the Dow fell 139.54 to 10.654.90. The Nasdaq
slid 44.31 to 2,778.46, and the S&P 500 slipped 14.50 to 1,345.49.
Market breadth was negative. On the New York Stock Exchange, decliners
beat advancers 1,308 to 925 as more than 182 million shares changed
hands. Losers outpaced winners on the Nasdaq 1,828 to 1,091 as more than
337 million shares were traded.
Europe's largest bourses and Asia's major markets fell. Treasury
securities edged higher. The dollar fell against the euro and was little
changed versus the yen.
J.P. Morgan drags Dow lower
With the floodgates opening to corporate warnings, the day's action on
the Dow was dictated by an announcement from merging financial services
companies Chase Manhattan (CMB: Research, Estimates) and Dow component
J.P. Morgan (JPM: Research, Estimates). They jointly warned that
fourth-quarter profit would be lower than analysts' forecasts and around
5,000 jobs would be cut.
Chase shares tumbled $2.94 to $41.56 while J.P. Morgan shares plunged
$10.75 to $153.50.
Other Dow financial components joined Morgan in negative territory.
Citigroup (C: Research, Estimates) lost $1.88 to $51.13 and American
Express (AXP: Research, Estimates) dropped $1.50 to $55.
The Nasdaq's fluctuations came agains a background of ongoing concerns
about softening revenue in the tech sector.
Investors may gain some insight into the extent of the pain when
Internet software maker Oracle (ORCL: Research, Estimates) reports
fiscal second-quarter results after the closing bell. The company is
forecast to report earnings of 10 cents a share, according to First
Oracle shares advanced 63 cents to $29.
But other techs were mixed with the chip sector attracting most of the
buyers while selling emerged in all the other sectors, including some
Applied Materials (AMAT: Research, Estimates) rose 25 cents to $42.94
and Intel (INTC: Research, Estimates) advanced 31 cents to $35.81, but
Altera (ALTR: Research, Estimates) slipped 13 cents to $26.38.
In tech news, IBM is beginning to move its latest high-endservers out
the door. Big Blue announced Thursday that it is beginning volume
shipments of its much anticipated eServer z900 as well as an enhanced
version of its "Shark"enterprise storage server. IBM (IBM: Research,
Estimates) shares jumped $1.50 to
Eyes turn to economy
Out of the way, finally, is the presidential election. More than five
weeks after Americans went to the polls, Gore conceded Wednesday night
to Bush. The new president-elect followed Gore's speech with an address
seeking to heal the breech caused by the contentious election.
Wholesale prices edged up 0.1 percent last month, the Labor Department
said, in line with economists' forecasts and below October's 0.4 percent
rise. The core rate, which excludes often volatile food and energy
costs, came in unchanged, versus forecasts of a 0.1 percent rise and the
0.1 percent decline posted a month earlier.
One sign that the economy may not be as weak as some fear: the number of
Americans filing new claims for unemployment benefits for the week ended
Dec. 9 was 320,000, down from a revised 352,000 for the week before, the
U.S. Labor Department reported Thursday.
Economists polled by Briefing.com had forecast claims of 355,000 for the
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Department of Political Science
SUNY at Albany
Nelson A. Rockefeller College
135 Western Ave.; Milne 102
Albany, NY 12222
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