Indexes Down on Earnings Reports
N E W Y O R K, April 24 -- Stocks fell today,pushing the Standard & Poor's 500 index back into bear marketterritory, as investors offloaded shares following bleakearnings from computer giant Compaq Computer Corp. and others.
The selling intensified late in the day and erased an earlyrally spurred by investors' snatching up beaten-down stocks inthe hope the U.S. economy will pick up after a series ofinterest-rate cuts by the Federal Reserve.
Stocks rallied this month on mounting hopes the market,which has been badly beaten over the last year, alreadyreflects slower corporate earnings growth. But a tumble in akey barometer of consumer confidence and a procession of dourearnings from high-tech bellwethers kept optimism in check onTuesday.
"All the statistics that come out are a bit of a double-edged sword," said Richard Babson, president ofBabson-United Investment Advisors Inc, which manages $1.8billion. "If consumer confidence is down, then may be the Fedwill cut rates more at the May meeting, but if the Fed iscutting more it's because earnings look bleak and there iscontinued deterioration in corporate balance sheets."
The tech-laden Nasdaq Composite Index fell 42.71 points, or2.07 percent, to 2,016.61 after rising almost 2 percent. JDSUniphase Corp. , down 13.8 percent, was among the most heavilytraded stock on the Nasdaq after the fiber optics parts makerreported disappointing financial results.
The blue chip Dow Jones industrial average lost 77.89points, or 0.74 percent, at 10,454.34.
The S&P 500 shed 14.89 points, or 1.22 percent, at1,209.47. That put the the broad market gauge back in bearmarket territory as defined by a drop of 20 percent or morefrom a peak. The index exited bear market territory last weekwhen the Fed surprised markets with a fourth rate cut thisyear.
"What we are seeing, and will continue to see, is some ofthis 'push me, pull you' in the market," Babson said.
Compaq fell more than 15 percent, or $3.15 to $17.50, onthe New York Stock Exchange. The computer giant late Mondayposted lower profits as it battled soft sales and price cuts byrivals such as Dell Computer Corp..
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