Stocks Extend Losses; HP and Dell Fall
Stocks sank further Friday with little news to change the overall mood of a market worried about a weakening economy.
The Dow Jones Industrial Averagewas more than 110 points lower, with Hewlett-Packard , Caterpillar , and GE leading the blue-chips down.
The S&P 500 and Nasdaqalso fell. The key S&P 500 sectors were all lower, led by energy, telecom and industrials. The CBOE Volatility Index, widely considered the best gauge of fear in the market, was down slightly at above 26.
Declines in the previous session pushed both the Dow Jones Industrial Average and the S&P 500 into negative territory for the week, although the Nasdaq was still clinging to a marginal gain.
There are no economic releases scheduled for Friday and the earnings calendar is relatively light.
There were a couple significant earnings releases, however, on Thursday after the bell. Hewlett-Packard said its fiscal third-quarter profit was in line with Wall Street estimates; the company had preannounced the quarter on Aug. 6. Investors remain concerned after CEO Mark Hurd's departure and the computer maker is leading the Dow lower.
Nasdaq bellwether Dellreported quarterly profit of 32 cents a share Thursday afternoon, two cents above estimates. The computer maker's shares were were down, after bouncing in and out of positive territory. Citigroup cut its price target for Dell Friday to $16 from $19, although it has a "buy" rating on the stock.
In other technology news, shares of Research in Motion are tumbling after Morgan Stanley cut its rating on the stock to "underweight" from "overweight," and cut its price target to $47 from $95, citing mounting security concerns from overseas governments with BlackBerry services, and demand for rival products, including the iPhone and Android phones.
The drumbeat of weak economic news weighed on crude oil prices, which have slumped to asix week low.Crude oil was down more than 1%, below $73 a barrel. The weakness in oil is affecting energy stocks, led by drillers Helmerick & Payne , down more than 4 percent, and Nabors Industries , down more than 3 percent.
A number of retailers announced stock buybacks recently, as their stocks have fallen by 24 percent or more since the beginning of May. Shares of these retailers were mixed.
Retailer Ann Taylor , was up after announcing plans to expand its existing share repurchase program to $400 million, and reporting strong second-quarter results, and
Similarly, department-store chain Nordstrom was higher have announcing it would buy back up to $500 million of its common stock through January 2012 using cash on hand.
Gap authorized a buyback of $750 million shares, but the stock was down Friday after the retailer reported same-store sales slipped 4 percent.
In other earnings news, shares of Hormel Foods are up slightly after the food-processing company released third-quarter earnings Friday morning that beat expectations, with profits rising 11 percent on strong revenues. Hormel raised its earnings forecast for the third time.
J.M. Smucker is up more than 2 percent after releasing results that exceeded expectations. First-quarter earnings for the marker of jams and Pillsbury products rose 5 percent, helped by healthier margins and a lower tax rate.
Teen retailer Aeropostale's earnings, also released Thursday after the bell, matched estimates but its revenues fall short and its shares were slightly lower.
Intuit's shares soared more than 10 percent after reporting a quarterly loss narrower than expected, as did shares of Salesforce.com , which beat consensus estimates with its second-quarter numbers, and raised its outlook for future sales based on strength in cloud-based computing.
In merger and acquisition news, BHP Billiton may see competition to its hostile takeover bid for Potash as reports suggest that the Canadian fertilizer company is in search of "white knight" bidders in China to trump the miner’s offer, currently worth $39 billion.
Elsewhere, Tyco stock will return to the S&P 500 to replace Smith International , which is being acquired by rival oilfield services company Schlumberger. Bernstein cut Tyco's price target to $47 from $48, but has a rating of "outperform" on the stock.
In news that seemed to confirm the weakness of the job market, Fidelity Investments released a survey which showed that a record number of U.S. workers are tapping into their retirement accounts to make it through the economic downturn.