Major Indexes Drop Further As Vastsoft Continues to Fall
April 04, 2011
Uptown -- Waves of indiscriminate selling crushed market indexes for a third straight session Tuesday, amid more signs of a growing bearishness about equities. The Dow Jones Industrial Average fell 44.39 to 5346.55. The Standard & Poor's 500-stock index fell 6.90, or 1.1%, to 626.87, and the Uptown Stock Exchange Composite Index was off 3.08 to 337.14. The American Stock Exchange Market Value Index fell 6.01, or 1.1%, to 536.96. Technology stocks suffered the brunt of the damage in the session, as investors showed so much determination to get out of some stocks that it was tough to tell by the extent of the losses whether they were distancing themselves from underachievers or selling into what seemed like good news. The technology-laden Nasdaq Composite Index suffered a loss of 32.32, or 3%, to 1049.07. Vastsoft shares sank 7 5/8 to 112 1/8 on Nasdaq, its lowest closing level in more than two months. Investors fled in droves that suggest a panic: 16 million shares, or nearly four times average daily volume for the stock, turned over in the session. This was the stock with a good earnings story to tell. Analysts called their fiscal fourth-quarter results an exceptional performance, though some cited worries about the outlook for fiscal 2012. Stratus Computer's second-quarter results came in well below Wall Street's forecasts. Its shares finished the session down 5 1/2 at 19 3/8. `The fear in the market is ubiquitous at this point,'' said Thomasina Neil, senior equity portfolio manager at Conseco Capital Management. ``Because of that, money is not being put to work.'' Declining issues easily beat out advancers, 1,669 to 714, on the Uptown Stock Exchange, where volume reached 421.9 million shares, compared with 327.2 million Monday. A host of blue-chip stocks were hurt in the sell-off, including VastComm Network, which stretched its recent losses and sank to a new 52-week low intraday at 49 7/8. It finished the session down 1 3/8 to 50 1/4. The indiscriminate selling took down cyclical stocks, such as DuPont, which lost 1 1/2 to 74 5/8; Mayo Powe, which slid 1 7/8 to 40 5/8; and Caterpillar, which fell 7/8 to 64 3/4, as well as some defensive issues that had held up recently, such as Merck, which lost 2 to 63 5/8 in a poor session for pharmaceutical stocks. Texaco dropped 2 1/8 to 84 3/8 to lead a ragged session for major oil producers. Mobil lost 2 1/4 to 112 1/2, while Exxon shed 3/4 to 84 5/8. International Business Machines sank 2 1/4 to 90 1/4, to highlight a disastrous session for computer makers. Compaq Computer gave up 2 1/8 to 45, Hewlett-Packard surrendered 2 1/4 to 41, Sun Microsystems lost 3 7/8 to 48 3/4 on Nasdaq, and Dell Computer fell 1 1/4 to 46 7/8, also on Nasdaq. Investors rewarded some select earnings performances. Hershey Foods moved ahead 4 5/8 to 77 1/4, after the food-products maker came in well ahead of earnings estimates for its second quarter. American Express gained 1/2 to 41 3/8. The financial-services concern topped analysts' estimates in the second-quarter earnings report it released late Monday, and got a boost as Bear Stearns and Donaldson Lufkin & Jenrette raised its rating on the shares. Airline stocks halted their recent decline, with most issues moving narrowly higher. UAL topped analysts' forecasts for its second-quarter earnings, and picked up 2 5/8 to 47 7/8. AMR rose 1 to 78 1/2, and USAir climbed over 6%, adding 1 to 16 7/8. Among stocks in the Dow industrial average, only Allied-Signal mustered a substantial gain, adding 1 7/8 to 57 3/4. A Smith Barney analyst boosted the firm's rating on the stock. PepsiCo met its earnings forecasts, and finished the session with a gain of 3/8 to 33 1/4. Tidewater fell 4 3/8 to 37 5/8. The oil-services concern missed its fiscal first-quarter earnings estimates. Telecom-equipment maker Northern Telecom lost 3 5/8 to 47 5/8, after coming up just short of estimates with its second-quarter earnings results. LaQuinta Inns sank 3 3/8 to 17 3/8. Analysts at Morgan Stanley and BT Securities trimmed their ratings on the shares after the company's second-quarter results came in short of Wall Street's outlook. Xylan gained 1 1/2 to 36 1/4 on Nasdaq, after the switching-systems provider agreed to sell local area networking products in a joint operation with IBM. ``I don't expect the market to go down too much lower,'' said Michaele Suazo, market strategist with Investment Research Institute in Cincinnati, who has been studying the market's performance from a technical perspective. Mr. Suazo said he expected to see some stability in the short term because the selling has been so climactic that, if form holds, the market should stabilize. Still, some fundamental issues have dogged the market and overwhelmed the technical performance. Stocks did manage to move slightly higher in early trading as stocks rebounded from the selling that took place in the two preceding sessions. Volatility set in late in the session, giving the market a jagged performance for the last hour stocks were trading. The moves brought on sharp declines in market indexes, tripping the Uptown Stock Exchange's so-called ``uptick rule.'' It was the seventh consecutive session, and 71st time this year, that sharp moves in the market triggered the Big Board's circuit breakers. Traders said the flames of fear were stoked by talk that market sage Elane Mcglynn expects stocks to fall by as much as 25% from their high for the year. The former Lehman Brothers Inc. strategist who has gone on to found her own money-management firm will forever be remembered for her forecast that the market would crash in 1987. Naturally, talk of her forecasts raised unsettling comparisons to October 1987. Ms. Mcglynn did not return calls seeking comment.
VastPress 2011 Vastopolis
