Profit warnings, poor job outlook weigh on stocks
Unlike the panicked swings seen last fall, however, the decline was more orderly, and some retrenchment had been expected following sharp rises in the final days of 2008 and into 2009.
Wall Street has been absorbing poor economic and corporate news far better since last November as some have dared to hope for a recovery in the second half of this year or early 2010, but the latest round of unnerving news proved to be too much to set aside.
Joe Saluzzi, co-head of equity trading at Themis Trading LLC, said the market is simply reacting to the day's drubbing of bad news. "One too many punches and the fighter finally went down," he said.
Media industry bellwether Time Warner Inc. said Wednesday it would book a $25 billion impairment charge in the fourth quarter for its cable, publishing and AOL units, while Intel Corp. said it now expects fourth-quarter revenue to drop a greater-than-expected 23 percent on a further weakening in demand from computer makers. The company already reduced its forecast in November.
Time Warner sank 70 cents, or 6.5 percent, to $10.28, while Intel dropped 88 cents, or 5.8 percent, to $14.49. Alcoa tumbled $1.23, or 10 percent, to $10.89.
The market was already worried about what the Labor Department's report on employment would bring on Friday, and received a disappointing harbinger Wednesday as the ADP National Employment Report said private sector employment fell by 693,000 in December, more than had been expected. The report is an unofficial gauge that the market has been increasingly monitoring as U.S. job losses mount.
The ADP report is making investors question whether government steps to revive the economy will prove sufficient.
"The market has shrugged off some bad news recently, and it's starting to get to the point where it can't do that anymore," said Scott Fullman, director of derivatives investment strategy for WJB Capital Group.
The Dow has rallied about 20 percent since its multiyear lows in late November, and the Standard & Poor's 500 index has surged nearly 25 percent. The S&P 500 began Wednesday's session up 3.5 percent for the first three trading days of 2009.
"We've had a big move," Fullman said. "What we're looking at now is just people getting a little cautious here."
Comments
- Family thanks effort after cave deat 7:34 p.m.
- Fesenko out with stomach virus 7:31 p.m.
- Cowboys get past Raiders 24-7 7:30 p.m.
- The Who for the Super Bowl 7:08 p.m.
- Thursday's sports transactions 7:06 p.m.
- Holiday festivals offer family fun 6:30 p.m.
- Story of the 'Bells' retold 6:30 p.m.
- Reasons Brooks, Reiner are classics 6:30 p.m.
- Festival of Trees 6:30 p.m.
- Region 7 All-Region Team 6:29 p.m.
- Man trapped in Nutty Putty cave dies
- Rivalry has had some 'turkeys'
- Cave rescuers committed to free man
- Holiday television program listings
- Highland players make special friend
- Temple Square to use LEDs
- Matt Reynolds vs. Koa Misi
- Missions teach players perseverance
- Salt Lake City woman shot
- Provo star leads Bulldogs to win
- BYU would like friendlier rivalry
261 - Protests against Phoenix LDS temple
210 - RSL wins MLS Cup on penalty kicks
202 - Bronco, Kyle rubber match
139 - BYU records with win
133 - Letters: Rushing to judge Palin
131 - Thunder rolls by Jazz
130 - Boys basketball rankings
118 - Editorial: Poor welcome for Palin
112 - Hall, Johnson matchup key
102
We're flooded with wise shopping tips this year, including these from...
Respect to all the schools and games but what about the Fremont vs. Viewmont...
We have known the Jone's family here in Stansbury Park for a number of years...
I heard that the Sophomore Class for WJ was pretty good. I am sure that they...
Makes one appreciate Stockton even the more.
God is our refuge, a very present help in trouble.
re: Define comprehensive About making generalizations. Do you know...
So terrorism is illegal, you tell me is this right morally?, You guys dont...
What an inspiring young women.
The proposal is merely to reform health care insurance. Eighty percent of...
Fast for the Navajo Indians-- the Apaches and the many other Native...


You can be the first to comment on this story.