Stock Market News for January 29, 2010 - Market News
Cautious forecasts from technology companies sent the broader market sharply lower Thursday, spurring concerns that the markets were entering a phase of consolidation. Weaker-than-expected economic reports added to the worries, prompting investors to take money off the table.
The decline in share prices was broad based as 23 of the 30 Dow components ended the day in the red. The blue-chip index closed down 115 points, or 1.1%, while the tech-heavy Nasdaq, hurt by weakness in its technology components, lost 42 points or 1.9%. The broader S&P 500 index slid 13 points, or 1.2%
This morning a Commerce Department report showed the economy grew at a better-than-expected 5.7% annual pace during the fourth quarter, the fastest quarterly rate since 2003.
Meanwhile, amid all the cacophony, Federal Reserve Chairman Ben Bernanke was handed over the Fed’s baton for a second successive term. While uncertainty about Bernanke’s fate led to a broad selloff last week, President Obama’s push for greater bank regulations and China’s move to curb lending intensified the selling.
Nevertheless, on Thursday, a late-session buying activity helped markets keep their head above water. Qualcomm’s (NASDAQ:QCOM) announcement of its 2010 revenue outlook cut sent its shares tumbling 14.2%. Driven by broad-based declines in all industry sectors, but fueled by the slump in large-cap technology shares, the S&P500 heads into the final trading day of the month with a 2.7% fall, the DJIA with a 2.9% decline, and the NASDAQ with a 4% dive.
Till date, fourth-quarter numbers have beat earnings estimates by 12% at the 173, S&P500 firms reported. Technology shares are down 7.1% this month as a number of tech firms have either reported disappointing numbers or failed to impress on the guidance front. Even Apple (NASDAQ:AAPL) shares fell 4.1% after its iPad device came under criticism for issues ranging from its name, to deficiencies of low battery life, blurring video imaging, and numerous capability shortfalls, including no Adobe flash capability, USB ports or multitasking capabilities, according to SeekingAlpha.
Meanwhile, growing risk aversion and sovereign debt issues have pushed the US dollar up 3.3% year-to-date against a basket of currencies and to a 6 ½ -year high against the euro. Yesterday's 0.2% advance in the greenback also reflected concerns resulting from an S&P warning that UK banks are no longer considered among the world's most stable.
Amazon (NASDAQ:AMZN) reported better-than-expected fourth quarter earnings of 85 cents and issued upside guidance. Microsoft (NASDAQ:MSFT) noted Windows 7 sales helped it post better-than-expected results. SanDisk (NASDAQ:SNDK) also topped analyst estimates, swinging to a profit after its margins improved.
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