Newspaper article THE JOURNAL RECORD

Earnings Fears Result in Dow's Second Big Plunge in a Week

Newspaper article THE JOURNAL RECORD

Earnings Fears Result in Dow's Second Big Plunge in a Week

Article excerpt

NEW YORK (AP) -- Earnings fears sent stocks reeling Thursday as dire outlooks from leading players in the technology and health care industries jolted a market already plagued by worries about inflation and interest rates.

The Dow Jones industrial average fell 83.11 to 5,520.54, its second big plunge in less than a week. Some late bargain-hunting helped erase part of a 133-point dive that dragged the famed blue- chip barometer below 5,500 for the first time since early May.

The technology-laden Nasdaq market, stricken by a stream of negative profit outlooks since early June, flirted with its biggest point-loss since the stock market crash of October 1987.

Other broad market measures cut their losses as the prices of many top companies proved too enticing for some to resist. But the day's slide, coming on the heels of Friday's nearly 115-point plunge on inflation jitters, was steep enough to convince many analysts that the bull market is seeing the first broad consolidation, or correction, since late 1994.

"You're getting one earnings nightmare after another," said Ralph Bloch, chief market analyst at Raymond James & Associates in St. Petersburg, Fla. "A great deal of damage has been done, and it is going to take a great period of time to rebuild."

The day's troubles actually took shape Wednesday evening, when Hewlett-Packard warned that a sudden slowdown in order growth would hurt the computer and printer maker's revenue and profits in the current quarter. The announcement came a day after Motorola reported second quarter profits that fell well shy of analyst expectations.

"If these premier technology companies are having difficulty, then it give you an indication that there are difficulties throughout the industry that nobody is likely to escape," said Bill Meehan, a stock market analyst at Prudential Securities.

The mood worsened Thursday morning when United HealthCare, one of the nation's biggest health insurers, became the fourth health maintenance organization in a month to predict disappointing second quarter earnings. …

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