Selloff sends stocks tumbling on Wall Street

Associated Press

NEW YORK – Stocks fell sharply today after an earning warnings from Eastman Kodak spooked investors already nervous about third-quarter results.

The selloff, the latest of many this month, quickly spread to blue chip and technology stocks, reflecting persistent concerns that higher oil prices, the strong U.S. dollar and slowing economic growth are hurting the bottom lines of many companies.

The Dow Jones industrial average fell 175.82 to 10,632.33, according to preliminary calculations.

Broader indicators were lower. The Nasdaq composite was down 43.42 at 3,697.80 and the Standard and Poor’s 500 stock index fell 8.90 to 1,430.13.

Dow component Kodak warned of disappointing profits, saying its business has been hurt by rising material costs, weakness in the euro, Europe’s chief currency, and other factors. The photographic products manufacturer fell $14.63 to $44.38, a 25 percent decline, on the New York Stock Exchange.

“The Dow is down because we got a warnings announcement from Eastman Kodak. In fact, that may be responsible for the whole move in the Dow,” said Bill Barker, an investment strategy consultant at Dain Rauscher. “These earnings preannouncements are continuing to keep the market off balance, whether they’re Kodak, Intel, DuPont or whoever.”

“Investors are very nervous and reluctant to put money to work right away until we get through this,” he said.

With the third-quarter earnings reporting season coming up, the market has been unloading stocks whose companies even warn of lower-than-expected profits. While Kodak has struggled in recent years amid intense competition in the film industry, its announcement today increased Wall Street’s uneasiness about earnings.

Kodak also fell as its rating was cut to “neutral” from “attractive” by a PaineWebber analyst.

Printer manufacturer Lexmark International tumbled $14.56 to $37.44, a 28 percent drop, after the company warned of lower-than-expected third-quarter earnings and analysts at Paine Webber and Bear Stearns downgraded the stock.

Concerns about the price of oil also pushed some old-economy retailers lower. The price of a barrel of sweet crude on the New York Mercantile Exchange was $31.53, down nearly $7 from last week, but worries about its effect on corporate profits continue.

Discount retailer Dollar General fell $2.94 to $17 after a Goldman Sachs analyst downgraded the stock. And Wal-Mart was down $2.64 at $47.

Energy issues were higher. Halliburton was up $1.02 at $47.75; Exxon Mobil climbed $1.46 to $87.31; and Enron jumped $1.38 to $85.81.

The Nasdaq struggled to stay in positive territory, helped somewhat by limited bargain hunting and some good earnings news.

Microsoft rose $1.44 to $62.69 after the Supreme Court ruled that the software giant’s appeal of its antitrust case should be heard in a lower court.

Handheld computer maker Palm rose $3.25 to $55.50 after it said quarterly profits would be above expectations.

But chipmaker Intel fell for the third straight session since it issued a profit warning, down $1.89 at $43.48.

The market’s overall tumble came the same day as an economic report which showed consumer confidence in the economy remains steady, but is at significantly lower levels than at the beginning of the year.

The Conference Board said its Consumer Confidence Index now stands at 141.9, up slightly from the revised 140.8 reported in August but down considerably from the record 144.7 registered in January and May.

Declining issues narrowly outnumbered advancers on the New York Stock Exchange, where volume came to 868.29 million shares, well ahead of the 782.73 million in the previous session.

The Russell 2000 index fell 4.69 to 510.69.

Copyright ©2000 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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