AMD and Alcoa got first-quarter earnings reports off to an unpromising start, but the surprise was that investors took the news fairly well.
The major indexes ended the day down modestly despite a sales warning from AMD and an earnings miss from Dow component Alcoa, as traders continued to debate whether the Federal Reserve has done enough to put the economy on the road to recovery. The Fed itself is debating the issue, as Fed meeting minutes from last month showed several members worried about the possibility of a prolonged downturn.
Two sectors that didn’t fare so well were financials, off 2% after investors decided they didn’t like the terms of Washington Mutual’s financing, and chip stocks, which lost nearly 3% on AMD’s warning. AMD lost 5%, and Intel, Applied Materials, KLA-Tencor and Novellus lost 3% or more each. Among hardware stocks, Sun was hit hardest, falling 3.3%.
Apple lost 2% on a Morgan Keegan downgrade on concerns about the strength of consumer spending, and Garmin also fell on a downgrade.
Jaco Electronics soared 70% on a New York state voting machine deal.
The Nasdaq lost 16 to 2348, the S&P slipped 7 to 1365, and the Dow fell 36 to 12,576. Volume declined to 3.69 billion shares on the NYSE, and 1.68 billion on the Nasdaq. Decliners led by a 19-13 margin on the NYSE, and 16-12 on the Nasdaq. Downside volume was 62% on the NYSE, and 65% on the Nasdaq. New highs-new lows were 41-23 on the NYSE, and 34-87 on the Nasdaq.