Indexes Down on Earnings Reports

N E W  Y O R K, April 24, 2001 -- 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..

The S&P computer hardware gauge eased 4 percent, reflectinglosses in Compaq, Dell, down $3.50 at $25.85 on Nasdaq, andother computer makers.

A key gauge in consumer confidence fell sharply in Aprilbecause of deteriorating business conditions and fears aboutjob security, the Conference Board's Consumer Confidence Indexshowed. The broad gauge of consumer attitudes fell to 109.2 from a downwardly revised March reading of 116.9, its sixthtumble in seven months. Consensus forecasts were for a fall to112.0.

"Consumer confidence was weaker than expected," said BarryBerman, managing director of equity trading at Robert W. Baird& Co. "But it may give the Fed more reason to cut rates at thenext (policy-setting) meeting."

Investors have been scouring corporate earnings for anyhint the economy is turning around, but lackluster earningscontinued to rain down on Wall Street.

JDS Uniphase fell $3.34 at $20.84 after it posted a $1.3billion loss, and said it would slash 5,000 jobs, or 20 percentof its work force, to cut costs in the slowing economy.

Check Point Software Technologies Ltd. reported earningsthat beat expectations but saw its shares fall more than 14percent amid investor worries about sluggish technologyspending. Check Point closed down $10.38 at $62.01.

Intel Corp. shed $1.18 at $29.14. Intel agreed to buy threeprivately held companies that make components for opticalnetworking equipment as the No.1 chipmaker continues its pushinto new markets beyond its bread-and-butter microprocessorbusiness.

The Philadelphia semiconductor index lost 2.47 percent amidlosses by other sectoral firms including Applied Materials.Orders for gear from North American-based chip-equipmentcompanies fell 23 percent in March from the previous month amida continued slump in the semiconductor industry, a trade groupsaid late on Monday.

Telephone and cable television giant AT&T Corp. nosed up 14cents to $22.12, although the Dow component posted a loss onstiff competition and weak prices, and warned itssecond-quarter earnings will be below current expectations.

Another Dow company, DuPont Co., the No. 1 U.S. chemicalcompany, said earnings dropped sharply because of a slowingeconomy, high raw material costs, and poor results from itsdrugs unit. Its shares however rose 67 cents at $44.80.

Struggling telecommunications equipment giant LucentTechnologies Inc. jumped $1.05 to $10.25. The company said itsresults dropped due to a slowdown in customer spending and thecompany's restructuring. Brokerage Salomon Smith Barney,however, raised its investment rating on the company.