Wall Street: Thursday close

By GRAEME BEATON
Updated:

 

EACH time Wall Street gets up, more profit warnings knock it down again. Bleak news from companies as diverse as International Paper, car parts maker Delphi Automotive and soft drink bottler Coca-Cola Enterprises pushed the market from its earlier highs.

The Dow Jones Industrial Average, already hit this week by the likes of Walt Disney, Nortel Networks and Palm, zig-zagged within a 200-point range before closing up 13.71 points at 9799.06.

The Nasdaq Index, fresh from a 6% hammering in the prior session, stumbled another 33.56 points or 1.8% to 1820.57, its lowest close since November 1998.

Tom Galvin, chief market strategist of Credit Suisse First Boston, said investors were still coming to grips with the downturn in company fortunes: 'I think everyone is stunned by the pace of the slowdown.'

The rate of slowdown was underscored by new figures from Washington showing that the US gross domestic product grew at 1% in the last quarter of 2000, the slowest rate in five years and down from 5% earlier last year.

President Bush, who has been talking down the economy to boost chances Congress will pass his $1.6 trillion tax cut package, did not help by reiterating that he was 'very worried' about the economy. The downturn has pressured profits and share prices and rattled investor expectations. The current profit quarter is expected to be the worst since 1991.

'The main concern on Wall street now is the continuation of profit jitters,' said Alan Ackerman, chief market strategist at brokers Fahnestock & Co. 'Investors are concerned that order slowdowns and bulging inventories may augur more bad quarters ahead.'

Shares in International Paper shed $1.11 or 3% to $35.11 after it said it would fell short of earnings expectations. Delphi Automotive rose 58 cents or 4.2% to $14.52 after it announced itr was cutting 11,500 jobs or 5.4% of its workforce to try to trim costs. Diversified manufacturer Federal Mogul, which also makes parts, fell slightly to $3.19 on a yellow flag for earnings.

Coca-Cola Enterprises tumbled $3.02 or 14% to $18.10. Investors trimmed shares in Coca-Cola itself $1.43 or 3.1% to $44.52 on fears that weakness in the bottler indicated a less fizzy performance for soda makers. Disney and Palm fell fractionally. Nortel Networks slumped 50 cents or 3.6% to $13.50.

Techs were indecisive. Sun Microsystems slid $1.15 or 7.3% to $14.70. Cisco Systems shed 50 cents 3.2% to $15.25. Microsoft was down slightly at $53.57. Intel gave up 37 cents or 1.4% to $26.56. IBM rose 63 cents or 0.7% to $95.04.

McDonald's, which has been battered over food safety scares, gained $1.21 or 4.8% to $26.40 on positive broker comments.

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