Stocks slipped today as the mood again soured on corporate earnings after software giant Microsoft warned of slowing growth.
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The drone of downbeat news reverberated through the market as Wall Street wrapped up one of the busiest weeks for corporate earnings reports with marquee names like top telecom equipment maker Nortel Networks and computer maker Gateway spreading more gloom.
"Depressed, disappointed, disenchanted — those are all good words to describe how investors are probably feeling right now about the market," said Charles Payne, analyst at Wall Street Strategies. "It seems that no company is safe in terms of being blown out of the water and … there doesn't seem to be any news on the horizon that will take stocks higher."
About 46 percent of the companies in the S&P 500 have now issued their results. Out of those, 61 percent have beaten estimates, 28 percent have matched forecasts, and the remaining 12 percent have fallen short, according to Thomson Financial/First Call.
The technology-laced Nasdaq Composite Index lost 17.22 points, or 0.84 percent, to close at 2,029.37.
The Dow Jones industrial average fell 33.35 points, or 0.31 percent, to 10,576.65, and the broad Standard & Poor's 500 Index slipped 4.17 points, or 0.34 percent, to 1,210.85.
The market managed to claw its way back from the day's worst levels as the session wore on, however, and many traders took comfort in that the damage from the barrage of bleak forecasts was not more devastating.
"The positive was that the market didn't respond overwhelmingly negatively to negative news," said Peter Gottlieb, portfolio manager at First Albany Asset Management.
For the week, the Dow finished with a gain of 0.4 percent, while the S&P 500 slipped 0.4 percent, and the Nasdaq fell 2.7 percent.
Downbeat Earnings Forecasts
Microsoft lost $3.39 $69.18, dragging heavily on both the blue-chip Dow and the Nasdaq indexes. The company posted a profit that was within estimates, thanks to robust software sales, but warned revenue growth would slow in the current quarter amid still-sluggish demand for personal computers.
Personal computer maker Gateway sank as low as $10.65, its lowest since September 1996, after it reported a loss, hit by flagging U.S. consumer sales, with no rebound in sight. Gateway ended with down $3.60 at $10.99.
Nortel Networks of Canada reported a whopping loss of $19.4 billion as sales sank. It did not give a forecast but said its financial health has improved. Nortel's U.S.-listed shares fell 21 cents to $7.54.
G7 Provides Hope
Investors also eyed a number of upbeat statements from the Group of Seven nations meeting in Genoa, Italy.
G7 leaders said the world economy was slowing more than expected but that sound policies and healthy fundamentals offer a basis for strong growth. They also said U.S. growth had slowed sharply, but long-term trends remained favorable.
"Anything that gives an official imprint to the signs that we've seen recently that the U.S. economy could be recovering is welcomed by the market," said Milton Ezrati, senior economic strategist at Lord Abbett & Co. "But the market has also learned to discount these statements as they usually tend to be positive."