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Markets: Dow slides under September low
Friday, July 19, 2002
Stocks fell sharply by midday Friday, with Wall Street touching fresh lows in early trading, as investors reacted to gloomy outlooks from a slate of tech biggies and a criminal investigation into a big-name U.S. company.
At 11:50 a.m. EDT, the Dow had fallen below its post-Sept.-11 closing low of 8,235.81 and sat down 282.10 points or 3.35 per cent to 8,127.39.
The tech-rich Nasdaq Stock Market's composite index, already mired at five-year-lows, lost 27.91 points or 2.06 per cent to 1,329.04.
The broad Standard & Poor's 500-stock index dropped 22.95 points or 2.60 per cent to 858.61, to its lowest point since June 1997, one day after tumbling to another five-year low.
Johnson & Johnson was the main drag on the Dow Jones industrial average, slumping 15.52 per cent or $7.72 (U.S.) to $42.01, on news U.S. regulators are conducting an investigation related to alleged record-keeping irregularities at a factory in Puerto Rico that makes an anemia drug linked to a spate of serious illnesses in Europe and Canada.
"The crisis of confidence is overhanging the market," John Davidson, president and chief executive officer at PartnerRe Asset Management, told Reuters.
In Canada, stocks also lost ground. The S&P/TSX composite index was down 52.03 points to 6,663.32. All of the big Canadian banks were in the red, including Toronto-Dominion Bank, down 2.57 per cent to $32.59 (Canadian), and the Royal Bank of Canada, down 2.51 per cent to $50.45.
Celestica Inc., Bombardier Inc. and BCE Inc. also hurt the index.
Nortel Networks was the most heavily traded stock, falling 4.46 per cent to $2.11 one day after it met expectations and announced an operating loss of $323-million (U.S.) or 9 cents a share. But the former stock darling also said it does not expect to be profitable until June, 2003 and that sales will be flat for the next quarter.
Nortel joined a host of other companies ― including Sun Microsystems Inc., Microsoft Corp. and Swedish telecoms equipment maker Telefonaktiebolaget LM Ericsson ― that helped sour sentiment by releasing earnings that met or beat expectations but lowering their sales forecasts.
While second-quarter earnings have not been terrible, investors are discouraged by the foggy and sometimes negative outlook offered by many companies.
Meanwhile, the U.S. trade deficit swelled to a record $37.63-billion in May, the Commerce Department said on Friday. Canada's own trade balance narrowed by almost $1-billion (Canadian) in May, coming in at just over $4.5-billion, sharply lower than the $5.1-billion forecast by economists.
Canadian wholesales trade figures fell 1.2 per cent in May while U.S. inflation was almost nonexistent in June.
On the TSX Venture Exchange, the S&P/TSX Ven was up 3.15 points to 1,103.47.
The U.S. dollar sank to its lowest level against the euro in 2.5 years, helping the loonie reverse losses from the past few days.
The Canadian dollar climbed 0.26 of a cent (U.S.) to 65.03 at the Friday open.
Friday, July 19, 2002
Stocks fell sharply by midday Friday, with Wall Street touching fresh lows in early trading, as investors reacted to gloomy outlooks from a slate of tech biggies and a criminal investigation into a big-name U.S. company.
At 11:50 a.m. EDT, the Dow had fallen below its post-Sept.-11 closing low of 8,235.81 and sat down 282.10 points or 3.35 per cent to 8,127.39.
The tech-rich Nasdaq Stock Market's composite index, already mired at five-year-lows, lost 27.91 points or 2.06 per cent to 1,329.04.
The broad Standard & Poor's 500-stock index dropped 22.95 points or 2.60 per cent to 858.61, to its lowest point since June 1997, one day after tumbling to another five-year low.
Johnson & Johnson was the main drag on the Dow Jones industrial average, slumping 15.52 per cent or $7.72 (U.S.) to $42.01, on news U.S. regulators are conducting an investigation related to alleged record-keeping irregularities at a factory in Puerto Rico that makes an anemia drug linked to a spate of serious illnesses in Europe and Canada.
"The crisis of confidence is overhanging the market," John Davidson, president and chief executive officer at PartnerRe Asset Management, told Reuters.
In Canada, stocks also lost ground. The S&P/TSX composite index was down 52.03 points to 6,663.32. All of the big Canadian banks were in the red, including Toronto-Dominion Bank, down 2.57 per cent to $32.59 (Canadian), and the Royal Bank of Canada, down 2.51 per cent to $50.45.
Celestica Inc., Bombardier Inc. and BCE Inc. also hurt the index.
Nortel Networks was the most heavily traded stock, falling 4.46 per cent to $2.11 one day after it met expectations and announced an operating loss of $323-million (U.S.) or 9 cents a share. But the former stock darling also said it does not expect to be profitable until June, 2003 and that sales will be flat for the next quarter.
Nortel joined a host of other companies ― including Sun Microsystems Inc., Microsoft Corp. and Swedish telecoms equipment maker Telefonaktiebolaget LM Ericsson ― that helped sour sentiment by releasing earnings that met or beat expectations but lowering their sales forecasts.
While second-quarter earnings have not been terrible, investors are discouraged by the foggy and sometimes negative outlook offered by many companies.
Meanwhile, the U.S. trade deficit swelled to a record $37.63-billion in May, the Commerce Department said on Friday. Canada's own trade balance narrowed by almost $1-billion (Canadian) in May, coming in at just over $4.5-billion, sharply lower than the $5.1-billion forecast by economists.
Canadian wholesales trade figures fell 1.2 per cent in May while U.S. inflation was almost nonexistent in June.
On the TSX Venture Exchange, the S&P/TSX Ven was up 3.15 points to 1,103.47.
The U.S. dollar sank to its lowest level against the euro in 2.5 years, helping the loonie reverse losses from the past few days.
The Canadian dollar climbed 0.26 of a cent (U.S.) to 65.03 at the Friday open.
