Associated Press
NEW YORK – Investors disappointed by poor earnings and unnerved by the presidential election limbo sent stocks sharply lower today with the Nasdaq composite index falling to a new closing low for the year.
The tech-focused Nasdaq ended down 171.26, or 5.35 percent, at 3,029.10, according to preliminary calculations. The last time the Nasdaq finished lower was a year ago, on Nov. 3, 1999, when it closed at 3,028.51.
Other indicators also fell sharply. The Dow Jones industrial average finished off 231.30, or 1.70 percent, at 10,602.95. The broader Standard &Poor’s 500 index fell 34.15 to 1,365.99, a loss of 2.44 percent.
Puzzled about how to invest amidst the political uncertainty, investors have focused on what they do know: earnings are key. They’re sticking to their pre-election pattern of selling high-tech issues whose profit outlook is poor. They’re also punishing non-tech stocks, particular those in the retailing sector, for earnings shortfalls.
Retailing and stocks in general are in for more losses, predicted Charles White, portfolio manager at Avatar Associates. He cited a dip in consumer confidence, a slowing economy and the unresolved election.
“This is a consumer who already is already thinking things are not as good as they once were,” White said. “You lump on top of that the political uncertainty and you just have a consumer who is already shaky and getting shakier in an economy that really depends on the consumer.”
What likely added to the markets’ decline today was investors’ uncertainty about what might happen with the election over the weekend.
Analysts expect investors will do more selling than buying across market sectors until the election is sorted out. That is expected to take at least until the end of next week.
“We are going to see quite a bit of weakness in the market until this is resolved. We are looking at a market that is looking for a leader,” said Alan Ackerman, executive vice president for Fahnestock &Co. “With no immediate end in sight, my sense is that sellers will be busy bees over the next few sessions.”
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