Rally Loses Steam; Techs Skid
A rally spurred by bargain hunting fizzled Thursday as weakness in technology leaders offset strength energy-related companies.
All three major indexes were lower, with the Dow Jones Industrial Average and the S&P 500 posting modest declines and the Nasdaq taking the hardest hit as some of its biggest names were pummeled by a dour outlook for the consumer.
The market rose during a congressional hearing on regulation in the financial crisis, which featured remarks by former Federal Reserve Chairman Alan Greenspan, who said he was "shocked" at the credit breakdown and that he was "partially" wrong to resist regulation of some securities.
Boeing and Chevronwere among the companies leading industrial stocks higher, while Amgen led a slew of pharmaceuticals to the upside after it beat earnings expectations and raised its full-year earnings forecast.
Energy stocks were among the day's biggest gainers as oil prices ticked higher, trading above $67 a barrel. Dow component ExxonMobil also surged in morning trading.
General Motors retreated after an earlier bump on news that the auto maker is taking steps to conserve cash including involuntary layoffs and the suspension of matching paymentsinto 401(k) plans.
In the meantime, more bad news came out for the economy.
The number of U.S. workers filing new claims for jobless benefits rose by 15,000, more than expected,last week, reinforcing evidence about the weak state of the labor market.
The main question for everybody seems to be how bad a recession will be; most economists say the current downturn will be far harsher than the blip of the 1990-1991 or even 2000-2001 recessions.
Goldman Sachs is likely to be the next company to announce layoffs. The brokerage is preparing to lay off 10 percent of its work force, according to the Wall Street Journal.
Layoffs have hit companies across the spectrum, including Merck , Yahoo , Caterpillar and PepsiCo .
On the earnings front, Eli Lilly slightly beat expectations, while Bristol-Myers Squibb said its earnings tripled, helped by the sale of its wound-healing unit and higher drug sales.
Dow Chemical said
ay that third-quarter operating earnings fell, hurt by a decline in shipment volumes and hurricane-related shutdowns.
Altria's profit beat market forecasts by 2 cents in the third quarter, when adjusted earnings per share from continuing operations came in at 46 cents.
Unadjusted diluted earnings per share were 42 cents in the third quarter, compared with 43 cents a share in the year-ago period.
United Parcel Service , the world's largest package delivery company, reported a 9.9 percent drop in profit that was milder than Wall Street had feared, though the company said it experienced a significant slowdown as the quarter came to an end.
Efforts to alleviate the woes of the U.S. housing market, which started the world crisis, continue, with the Bush administration weighing a roughly $40 billion proposal to help forestall housing foreclosures, according to a report in the same paper.
U.S. foreclosure activity in September rose 21 percent from a year earlier but fell by double-digits from the prior month as some state laws slowed the foreclosure process, according to a monthly report by research firm RealtyTrac.
But there are reports that some buyers are trickling back to the housing market, attracted by rock-bottom prices.
Internet stocks were among the biggest drag on the market.
Amazon.com shares fell as much as 10 percent after the online retailer late Wednesday cut its 2008 revenue and income forecasts, saying sales in the holiday quarter would fall short of Wall Street expectations.
Google followed Amazon lower as did a slew of other big names in the sector.
Coca-Cola, under consumer weakness, and Caterpillar, battered by a dismal outlook for the new housing industry, led Dow components on the downside.
Asian stocks closed mostly lower but off the lows earlier in the session, while in Europe stocks were down between 1 and 3 percent.
Still to Come:
THURSDAY: Earnings from Microsoft after the bell
FRIDAY: Existing-home sales; Earnings from LM Ericsson
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