Profit Jitters Snap Dow’s Record-Setting Streak
Stocks suffered some profit-taking Wednesday, halting a record-setting streak, as investors grappled with renewed worries about corporate earnings, a concern sure to be heightened by a late warning from Intel.
The Dow Jones industrial average fell 45.59 to 8,539.24, ending a five-session string of record highs that had added 215 points to the blue-chip barometer.
Most broad-market indicators also posted modest losses, although the technology-heavy Nasdaq market managed a small gain as Dell Computer surged 6 percent after two sessions of profit-taking in that high-flying issue.
The Dow was tugged lower by a big loss from Disney, which slid 3-1/8 to 106-7/8 after two Wall Street firms lowered their forecasts for the media conglomerate’s earnings for the current quarter.
But the most unsettling development of the day came after the closing bell with a profit warning from Intel - the type of high-profile announcement that frequently sends the technology sector and the entire market into convulsions.
Declining issues outnumbered advancers by a 7-to-5 margin on the New York Stock Exchange, where volume totaled 644.28 million shares, up from Tuesday’s pace.
Some of the stocks that moved substantially or traded heavily Wednesday:
NYSE
First Union, down 3/4 at 52.
The Money Store, up 4-1/4 at 31-3/4.
First Union agreed to buy the home equity lender for stock valued at $34 a share, or $2.1 billion.
Kmart, up 1-1/4 at 14-11/16.
The nation’s No. 3 retailer reported a $186 million profit for its fourth quarter ended Jan. 28, beating analyst expectations as it continued a slow, steady recovery.
Federated Department Stores, up 2-3/8 at 50-1/4.
The Cincinnati-based retailer reported earnings of $379.1 million for its fourth quarter ended Jan. 31, a 31 percent improvement from year-earlier levels that topped Wall Street forecasts.
NASDAQ
General Magic, up 4-7/32 at 6-15/32.
Microsoft agreed to buy a minority stake in the communications software concern. The deal calls for Microsoft to make a $6 million payment to General Magic and buy the rights to some of General Magic’s technologies.
3Com, up 2-7/16 at 37-11/16.
Donaldson, Lufkin & Jenrette Securities upgraded the networking and data communications concern to “but” from “market perform,” Dow Jones News Service reported.
Fine Host, down 7/16 at 3-3/16.
The stock extended Tuesday’s 64 percent plunge, which came after a three-month halt in trading spurred by the discovery of accounting irregularities.