Wall Street report: Friday close
MARKETS tumbled as new figures showed American consumers losing confidence. The Dow Jones Industrial Average fell 98.95 points or 1% to 9903.04. The Nasdaq Index fell 38.18 points or 2.1% to 1805.19 as investors appeared less confident of a snapback in demand for products including computers, semiconductors and software. For the week, the Dow rose 1.6% while the Nasdaq gave up 0.8%.
Stocks were boosted on Wednesday by figures showing an unexpected leap in retail sales. But the latest measure of how consumers feel was less rosy. The preliminary reading of the University of Michigan's consumer confidence survey dropped to 90.9 in February from 93 in January, its first decline in five months.
Economists said the decline could have sprung from several factors, including cynicism about corporate America in the face of Enron's collapse and the subsequent accounting flap, the continuing stream of job losses and the ongoing recession.
All of those concerns were on display in company headlines. IBM slumped $5 or 4.6% to $102.89 on a newspaper report that said it had used the sale of a subsidiary to boost operating profits and beat Wall Street expectations. IBM, which has increased its earnings every quarter since 1997, defended its book-keeping as proper and within established guidelines.
Graphics chip maker Nvidia plunged $4.81 or 7.7% to $57.35 as it disclosed a Securities and Exchange Commission inquiry into its accounting. And telco WorldCom dropped 39 cents or 5.5% to $6.73 after it suspended three employees for suspected double booking of sales.
Qwest, the biggest local telephone company, defended its accounting amid concerns over its credit worthiness. Its shares rose fractionally to $7.56. General Electric fell 89 cents or 2.3% to $37.11. Conglomerate Tyco International, which has seen its shares cut in half since late last year, recovered $1.15 or 4.3% to $27.90 after saying it would lop 1,450 jobs. General Motors said it would cut 2,850 employees or less than 1% of its workforce. GM shares fell 45 cents or 0.9% to $50.32.
Dell Computer's tepid outlook on demand for personal computers reminded investors that techs might not roar out of recession as many analysts had forecast. Dell shares were off $1.21 or 4.5% to $25.60. Telco Sprint shed 50 cents or 3.6% to $13.30 after JP Morgan said it was wary about the company's finances.
Oil services company Halliburton, once headed by US Vice President Dick Cheney, gained $1.61 or 11% to $16.27 after a court judge temporarily halted 200,000 asbestos claims against the company.
