Dell/Tech Stocks, Gustav Nerves Weigh on Market
CNBC producer Robert Hum is filling in for Bob Pisani Friday.
Markets have headed lower late in the morning and into the afternoon, primarily on the Dell and Gustav news.
Tech stocks have been struggling all day and lead the decline following Dell’s disappointing earnings report after the close yesterday.
While sales came in above expectations, the company’s margins were pressured by substantial price cuts, causing total profit to fall 17% from Q2 last year. Dell’s stock is paying the price, declining 13% today -- its worst 1-day percentage decline in nearly 8 years.
Crude oil prices and natural gas futures were higher this morning, but the markets have not had any help from energy stocks. Rising shortly after the open, energy stocks have fallen from their highs, as energy companies continue to prepare for tropical storm Gustav.
Sen. John McCain’s choice of Alaska Governor Sarah Palin as a running mate came as a surprise to many. Despite the morning weakness today, traders don’t attribute the triple-digit decline to the announcement.
While markets typically don’t like surprises, many noted that with the light trading volume today (and during the entire week for that matter), it’s difficult to immediately draw any conclusions on Wall Street’s reaction to the news. They advise to let the dust settle over the weekend and see what happens when most people return to work next week following the holiday weekend.
Keep in mind it’s also the last day of the month today. For the month: Dow up 1.9%, S&P up 1.7%, Nasdaq up 2.0%.
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