Stocks tumbled Tuesday on earnings warnings from the likes of Lexmarkand inflation warnings from a key Federal Reserve official.
Shares of Lexmark plunged 28.6% after the company warned that its third-quarter earnings will come in more than 50% lower than the $1.02 analysts were looking for. The company warned for the fourth quarter too, blaming weak laser and inkjet demand.
The broader market was hit hard after Dallas Federal Reserve President Richard Fisher said inflation is running “near the upper end of the Fed’s tolerance zone,” suggesting that the Fed’s interest rate hikes will continue.
The Nasdaq fell 16 to 2139, the S&P lost 12 to 1214, and the Dow tumbled 94 to 10,441. Volume rose to 2.34 billion shares on the NYSE, and 2.04 billion on the Nasdaq. Decliners led 21-11 on the NYSE, and 18-12 on the Nasdaq. Downside volume was 71% on the NYSE, and 56% on the Nasdaq. New highs-new lows were 223-90 on the NYSE, and 147-43 on the Nasdaq.
Sunfinished unchanged after a collaboration announcement with Googlewas light on details. Microsoft, meanwhile, lost 2% on the threat of competition from Sun and Google, and uncertainty over its online music plans after the software giant ended licensing talks with music companies.
Texas Instrumentsfell 5.5% on a Goldman Sachs downgrade, while Axcelisgained 8.7% on a Goldman upgrade.