Market Winning Streak Ends At One

After a one-day respite, stocks resumed their grim descent Thursday, with all major indexes giving up Wednesday’s gains and much more amid a slew of mixed earnings reports.

The Dow Jones tumbled 133 points, nearly twice Wednesday’s gain of 69, finishing at 8409. The tech-heavy Nasdaq also nearly doubled Wednesday’s gains with losses, dropping 40 points, or 2.9%, to 1357. The Nasdaq rose 22 points Wednesday. The S&P 500 closed below 900 Thursday for the first time since 1997, sliding 24 points to 882 and obliterating Wednesday’s 5-point rise.

While the tech sector was battered as a whole, there were a couple of notable exceptions. IBM shook off a a Q2 report showing yet more declining net income as investors focused instead on the company’s prediction that it would meet analysts’ earnings forecasts for the fiscal year.

Shares of Big Blue gained 2%, or $1.36, to close at $72.05. IBM’s profit in the second quarter was 3 cents per share, well below the $1.15 per share in the year-ago quarter but ahead of estimates. Bear Stearns downgraded IBM to “neutral” from “attractive.”

Network server maker Sun Microsystems rose 2%, or 12 cents, to $5.80 before announcing quarterly profits for the first time in a year. Sun reported a fiscal fourth-quarter profit of $20 million, or 1 cent per share. In last year’s Q4, Sun lost $88 million, or 3 cents per share — the first of four consecutive losing quarters.

AOL Time Warner sank 5%, or 66 cents, to $12.45 in the wake of a Washington Post story that accused the company of inflating its revenue and amid rumors that chief operating officer Robert Pittman would resign. The rumors soon proved true; Pittman stepped down after the final trading bell.

Data storage vendor EMC fell 3%, or 23 cents, to $8.40 after reporting a breakeven second quarter, compared to a 5 cents per share profit in the year-ago quarter. EMC’s revenue was down 31% to $1.39 billion as customers continue to delay expenditures.

Cell phone maker Nokia declined 6%, or 79 cents, to $13.33 despite hitting Q2 targets for sales and profits. Company officials told investors to expect rough economic conditions through the rest of the year.

Business software maker Siebel Systems plummeted 18%, or $2.12, to $9.62 after falling short of sales and earnings estimates for the second quarter. Siebel announced it would eliminate 1,200 jobs and warned that Q3 numbers will miss analysts’ forecasts. License revenues for Q2 were $170 million, below street estimates of $190 million, while Siebel’s profit of 6 cents per share failed to meet forecasts calling for net income of 9 cents per share.

News Around the Web