Stocks fell Monday after Citigroup said mortgage market troubles are continuing and joined with JP Morgan Chase and Bank of America in a Treasury Department-organized $80 billion bailout of the credit market.
The news raised fears that the crisis isn’t over, sending investors running for cover a day before some big earnings reports. Tech sector leaders like Google, Research in Motion, VMware and Baidu.com all fell 2.5% or more.
Tuesday will see earnings reports from IBM, Intel and Yahoo. eBay will report on Wednesday, and AMD and Google on Thursday, among other names reporting this week.
Analysts expect a 6.4% rise in IBM’s sales to $24 billion and earnings of $1.67 a share, according to Thomson Financial. Yahoo is expected to deliver a 10.6% sales increase to $1.24 billion and earnings of 8 cents a share, and Intel is expected to report 10% sales growth to $9.62 billion and earnings of 30 cents a share. Analysts are looking for 26% sales growth to $1.83 billion from eBay and 33-cent earnings, 58% sales growth to $2.94 billion and $3.78 a share earnings from Google, and a 15% sales gain to $1.52 billion from AMD, but AMD is also expected to report a 62 cent a share loss, thanks to ongoing pricing pressures.
Tektronix was Monday’s big winner, soaring 34% on a takeover offer from Danaher.
Level 3 fell 11% on news that it will replace its CFO, raising concerns about the company’s quarterly results, which will be reported Oct. 23.
InfoSpace jumped 9% on news that it will sell its mobile services business to Motricity.
Broadcom gained 4% on a new 3G wireless chip, and Tellabs was up on takeover speculation.
The Nasdaq lost 25 to 2780, the S&P fell 13 to 1548, and the Dow lost 108 to 13,984. Volume rose to 3.1 billion shares on the NYSE, and 2.02 billion on the Nasdaq. Decliners led by a 23-9 margin on the NYSE, and 21-9 on the Nasdaq. Downside volume was 75% on the NYSE, and 71% on the Nasdaq. New highs-new lows were 157-91 on the NYSE, and 137-112 on the Nasdaq.