Dow Drops Nearly 1%; Techs Get Slammed
Stocks tumbled Thursday as the dollar's gains and some disappointing economic numbers offset the positive earnings momentum this morning.
Technology and energy stocks were some of the biggest decliners.
The dollar hit a 6 1/2-year highagainst the euro, pushing oil and gold lower, amid nagging worries about some euro-zone countries including Greece and Portugal.
In the morning's economic news: Jobless claims dropped by 8,000 last week, while orders for durable goods, big-ticket items like refrigerators and cars, rose 0.3 percent in December. Both numbers showed an improvement in the economy but fell short of expectations.
Apple and Qualcomm led the decline in technology.
Qualcomm tumbled more than 10 percent this morning after the chip maker delivered a cautious outlookand at least two analysts slashed their price targets on the stock, citing lower prices from competitors among the reasons. Think Equity even slashed its rating on the stock, to "hold" from "buy."
And Apple skidded more than 3 percent a day after introducing its iPad tablet computer.
The early reviews coming in suggest that the iPad is slightly less than "magical," as Steve Jobs put it, despite its attractive low starting price of $499. SeekingAlpha did a pretty good job of summing up some of the iPad's flaws, which include no multitasking capabilities, no USB ports, no Adobe Flash, motion blurs in video and low battery life. And PC World adds — no iPants.
Earnings were the big buzz today: Ford shares rose after the auto maker delivered its first full-year profit since 2005and said it expects 2010 to be another profitable year as it gains market share.
Good reports overall from consumer-products makers: Procter & Gamble beat expectations and said sales should rise this year. Diversified manufacturer 3M also raised its full-year outlookamid strong demand across the board, and Nokia hit it out of the park amid strong sales in China.
And Eastman Kodak — remember them? Their shares shot up 18 percent today after the company topped earnings expectations, helped by licensing revenue from camera and phone makers and strong sales of consumer inkjet printers.
Netflix shares jumped 20 percent after the movie-rental service delivered solid earnings as it added more than a million subscribersduring the quarter and raised its forecast.
The only significant disappointment for the morning came from AT&T , which met expectations but saw a mixed bag on the revenue front.
The market was also digesting President Obama's State of the Union address, which focused heavily on jobs and the economy. Investors seemed to like the president's call for tax cuts and tax credits for small businesses as well as his statement that he is "not interested in punishing banks."
Toyota's U.S.-traded shares continued to slide after the Japanese auto maker expanded an October recall of vehicles with a floor mat problem that caused some accelerator pedals to stick. This is separate from the most recent recall involving a different accelerator pedal issue.
RealtyTrac reports that although foreclosure activity centered around the Sun Belt states in 2009, it's now spreading to previously untouched areas.
Still to Come:
THURSDAY: Jim Chanos speaks on China bubble; seven-year auction; Earnings from Microsoft and Amazon after the bell
FRIDAY: First look at Q4 GDP; Chicago PMI; consumer sentiment; Earnings from Chevron
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