Wall Street was getting beaten up pretty badly in mid-afternoon trading Tuesday. Traders looked in vain for encouraging signs, and instead found trouble abroad and the increasing probability of a slowdown at home.
Will Al "The Investor's Pal" Greenspan, now meeting with other Fed bigwigs, come riding to the rescue again? Don't count on it.
The Dow Jones Industrial Average fell 123.07 points to 9222.63. The Nasdaq Composite Index shed 63.56 to 2446.53, and the S&P 500 was down 22.88 at 1250.12.
Greenspan and his posse are now in a two-day meeting of the Federal Open Market Committee. But because no one is expecting the crew to tinker with interest rates, investors are playing it cautious by selling off shares to lock in gains from recent advances.
"The bulk of earnings reports are out, so there's an absence of good news," said Christine Callies, chief investment strategist for Credit Suisse First Boston. "There won't be more good news for a while."
By that she means the market likely will show increased volatility in coming weeks, and is expected to ultimately lose ground -- perhaps by as much as 10 percent -- through the first quarter. With such downbeat predictions floating around, is it any wonder many investors are bailing out of stock positions before the storm hits?
Sentiment wasn't helped by news that Brazil's central bank president has been tossed out less than a month after being appointed to the thankless job. On top of that, Japan's financial point man, Eisuke Sakakibara, warned of worsening trade friction between his country and the United States. Then again, he also said that "the only thing I'm optimistic about is the Japanese economy," so there's some question as to his current state of mind.
From the earnings front, Sprint (FON) dropped US$4.25 to $79.95 after reporting quarterly profit of 79 cents a diluted share, excluding one-time gains. This was an increase of 13 percent over a year before, but still 6 cents short of analysts' estimates. Sales nearly tripled for Sprint's wireless unit, Sprint PCS, but its losses were also up.
Broadcast.com (BCST) fell $13.75 to $137.69 after Intel filed with the Securities and Exchange Commission to sell more than 300,000 shares in the online broadcaster. While the chipmaker says it routinely fiddles with its portfolio depending on market conditions, this isn't the most glowing vote of confidence in broadcast.com's future prospects.
MovieFone (MOFN) climbed 15 percent to $30.38 following announcement of its $388 million acquisition by America Online (AOL). But AOL was down $5.50 at $165.69 as traders mulled how the movie listing and ticketing service will mesh with the online service's operations.
Speaking of meshing, eBay (EBAY) is expanding its marketing relationship with Netscape Communications' NetCenter portal, opening the door to increased traffic to its online auction service. But this otherwise cheerful news wasn't enough to resist the market's prevailing winds, and eBay was $14.75 lower at $247.25.
Lycos (LCOS), on the other hand, rose $3.88 to $131.31 after moving to allay recording companies' fears that its new online music directory will turn into a playground for pirates. Lycos said it will avoid linking to sites known to offer contraband tunes -- a more conciliatory stance than its initial position that it can't be held liable for the deeds or misdeeds of linked sites. Lycos is now in the process of acquiring the parent company of Wired News.
In IPO action, Perot Systems (PER), the Texas data-services firm founded by leprechaun presidential wannabe Ross Perot, more than doubled to $40.50 in its trading debut. The company sold 6.5 million shares initially priced at $16 apiece.
Cisco Systems (CSCO) slipped $3.06 to $111.94 ahead of reporting its quarterly results. Profit of at least 35 cents a share is expected. Elsewhere in tech, Microsoft (MSFT) lost $6.31 to $166.63, Dell Computer (DELL) shed $1.13 to $106.88, and Intel (INTC) was down $4.69 at $133.19.
Lastly, PeopleSoft (PSFT) declined 56 cents to $18.19 after being socked with lawsuits alleging the business-application publisher defrauded shareholders by inflating the company's stock value for the past few years. Specifically, the complaints charge that PeopleSoft execs misstated company earnings in 1996, 1997, and 1998 by downplaying research and development costs.
This is a fine how-do-you-do after PeopleSoft last week reported lower than expected quarterly results and said it would be handing pink slips to about 450 workers.
