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Wall Street sputters on tech weakness
10/14/2005
NEW YORK, Oct 12: (AFP) - Wall Street struggled again Wednesday amid pressure in the technology sector after a disappointing Apple Computer revenue result and an analyst downgrade for Intel Corp.
The Dow Jones Industrial Average edged up 4.56 points (0.04 percent) to 10,257.73 while the tech-heavy Nasdaq composite retreated 13.89 points (0.67 percent) to 2,047.20 at 1540 GMT.
The broad-market Standard and Poor's 500 index shed 2.14 points (0.18 percent) to 1,182.73.
The market in recent sessions has been gripped by negative sentiment linked to rising inflation, energy costs and interest rates, and uncertainty about the strength of the economy following the recent hurricanes.
Analysts said the market has been in a funk but that the trend could improve, especially with stocks beaten down to relatively cheap levels.
"Generally, the equity market's performance remains disappointing, with the (broad market) down six of the past seven days," said Alfred Goldman at AG Edwards.
Despite the pressure in early trade, Edwards said, "the pre-conditions for an upturn in the market are in place."
Some analysts hold out hope that third-quarter earnings will prove strong and provide reassurance about the economy.
"At this point it may be possible that inflation fears and higher interest rates have been discounted in the market," said Jay Suskind, market strategist at Ryan Beck and Co.
Among active shares, Apple dropped 1.69 or 3.3 percent to 39.90 as investors showed disappointment over revenues in the latest quarter even though its profit that rose fourfold on surging sales of iPod music players and Macintosh PCs.
Advanced Micro Devices dropped 2.10 or 8.7 percent to 21.90, after posting gains earlier in the week. The company had a better-than-expected third-quarter profit, but the stock fell Wednesday due in part to concerns over valuation.
Rival chipmaker Intel was down 53 cents at 22.89 after Prudential cut its rating on the chipmaker to underweight from neutral, saying a number of challenges will hurt revenue and margins.
General Motors, a Dow component that suffered a 10 percent drop Monday in the wake of parts maker Delphi's bankruptcy filing, was slightly weaker again after making back some of the loss on Tuesday. GM shares dipped seven cents to 26.35.
Pfizer, also in the Dow, shot up 60 cents to 24.90, benefiting from a favorable British court ruling for its Lipitor patent.
Bonds remained under pressure as well. The yield on the 10-year US Treasury bond climbed to 4.411 percent from 4.365 percent Tuesday and that on the 30-year bond rose to 4.623 percent against 4.590 percent. Bond yields and prices move in opposite directions.
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