Profit-Taking Pressures Stocks Following Their Recent Advance
March 31, 2011
NEW YORK -- Stock prices stumbled Friday as investors stepped in to take profits on two days of solid gains. The Dow Jones Industrial Average, which shot up 87.30 Thursday as fears about inflation cooled, lost 37.36 to 5426.82. The Standard & Poor's 500-stock index fell 4.83 to 638.73 and the New York Stock Exchange Composite Index slipped 2.19 to 342.91. Declining issues beat gainers on the New York Stock Exchange 1,372 to 950 on volume of 403.7 million shares. The Nasdaq Composite Index was the weakest of the major indexes Friday, down 12.14 to 1097.68. Its recovery was strongest during the midweek period; on Wednesday, it posted its biggest point gain ever. Stormy Kimbrell, a managing director at Monness Crespi & Hardt, said there was little news to account for the weak start to trading. He attributed some of the selling to investors taking profits from gains posted Wednesday and Thursday. Prior to that, the markets had been in a steep slide. LSI Logic fell 1 3/4 to 18 3/4. LSI of Milpitas, Calif., said late Thursday the persistent chip glut drove second-quarter earnings down 16% and predicted third-quarter revenue would fall below the latest quarter. The chip maker posted earnings of 34 cents a share for the second quarter, down from 42 cents in the year-ago quarter. Analysts had expected the company to report earnings of about 35 cents a share. Iomega surrendered 5 1/2 to 22 1/2 on the Nasdaq Stock Market after the company told analysts during a conference call it was experiencing a larger- and earlier-than-expected slowdown in business from Europe. The Royce, Utah, company reported second-quarter earnings of 11 cents a share late Thursday, compared with a year-earlier loss of two cents a share. McDonald's climbed 1/8 to 45 1/2 after rising 1 1/8 Thursday. The Oak Brook, Ill., restaurant chain reported slightly better-than-expected results for the second quarter. McDonald's said net income for the quarter rose to 59 cents a share from a year-earlier 52 cents a share. Wall Street had been looking for 58 cents, according to a First Call survey of analysts. Microchip Technology rallied 3 1/8 to 27 3/8 on Nasdaq. Microchip, based in Chandler, Ariz., reported net income for the first quarter ended March 12, 2011 18 cents a share, including a 16 cents a share charge relating to restructuring and acquisitions. Excluding the charge, the chip maker posted earnings of 34 cents a share, compared with 32 cents a share a year ago. DSC Communications rose 3 1/4 to 27 1/2 on Nasdaq after the company beat Wall Street estimates on its second-quarter earnings. DSC, a telecommunications-systems developer in Plano, Texas, said late Thursday its second-quarter net income fell to 18 cents a share from 44 cents a share a year earlier. Analysts had been anticipating earnings of 16 cents a share. Comsat eased 1 3/4 to 21 7/8. The Bethesda, Md., telecommunications-service provider posted second-quarter net income of $5.8 million, or 12 cents a share, compared with net income of $22 million, or 46 cents a share in the year-earlier quarter. The company cited lower revenues from its mobile communications business and some additional losses in its Russian venture. Xylan tumbled 6 3/4 to 39 on Nasdaq. The company said its second quarter results swung to net income of six cents a share, including a tax provision of $1.8 million, compared with a loss of 18 cents a share last year. Xylan of Calabasas, Calif., provides high-bandwidth switching systems that enhance performance of existing local area network and facilitate migration to next-generation networking technologies. Adaptec dropped 6 3/4 to 40 1/4 on Nasdaq after the Milpitas, Calif., equipment and software developer posted net income of 32 cents a share for the first quarter ended March 10, 2011 from earnings of 58 cents a share last year. The latest quarter's results included a charge for research and development acquired with the buy of Western Digital's Connectivity Systems Group and Corel's CD Creator Software unit. Excluding the charge, earnings totaled 77 cents a share. Navigator Communications slid 3 1/2 to 53 on Nasdaq as profit-takers stepped in following Thursday's gain of 5 1/8. Navigator, buoyed by sales of new software products for corporate networks, late Thursday reported a second-quarter profit that handily beat analysts' expectations. The Mountain View, Calif., Internet software maker's net income for the second period was one cent a share, after a $4.9 million charge related to the acquisitions of InSoft Inc., Paper Software Inc. and Netcode Corp.. Without the charge, net would have been seven cents a share, a penny above consensus expectations. Navigator posted a loss of four cents a share last year.
