Stocks Fall Ahead of HP's Results
Page 1 of 1
Stocks tumbled Monday on more financial fears and jitters ahead of quarterly results from Hewlett-Packard (NYSE: HPQ) and Home Depot (NYSE: HD).
Worries about the future of Fannie Mae (NYSE: FNM), Freddie Mac (NYSE: FRE) and Lehman Brothers (NYSE: LEH) sent financial shares plunging and the broader market 1.5% lower.
Tuesday will be even busier for investors, who will have to contend with housing and inflation data and earnings from Home Depot before the market opens and then results from HP after the close.
Tech stocks have fared much better than their blue chip counterparts in recent months. The Nasdaq has gained more than 10% since its low for the year in March, while the Dow is down by more than 2% since then.
The reason for the outperformance has been investors' belief that IT spending will continue to hold up despite a brutal housing market and credit crisis now in its thirteenth month. It will be up to HP this week and Dell (NASDAQ: DELL) next week to prove that the trend remains intact.
Analysts expect HP to post July quarter earnings of 83 cents a share on an 8% rise in sales to $27.4 billion, and they are looking for similar growth from the company well into next year.
Despite broad-based weakness, some stocks managed gains on Monday, among them Broadcom (NASDAQ: BRCM) and Nvidia (NASDAQ: NVDA), which rose on optimism about their prospects even as SanDisk (NASDAQ: SNDK) shares were hit by skepticism over takeover rumors.
VMware (NYSE: VMW) was another winner, up 4.7% on no apparent news.
The Nasdaq fell 35 to 2416, the S&P lost 19 to 1278, and the Dow plunged 180 to 11,479. Volume declined to 3.88 billion shares on the NYSE, and 1.69 billion on the Nasdaq. Decliners led by a 24-9 margin on the NYSE, and 19-9 on the Nasdaq. Downside volume was 82% on the NYSE, and 82% on the Nasdaq. New highs-new lows were 37-106 on the NYSE, and 47-88 on the Nasdaq.