US stocks tumbled to new lows for the year on Thursday after a disappointing earnings and outlook from technology bellwether Hewlett-Packard Co and record oil prices jolted confidence.
Mixed economic data muddied the picture as retail sales data showed shoppers still trying to cope with higher energy prices and stagnant wage growth.
The combination of bad news sent the Nasdaq to its lowest close since August 18, 2003, while the Standard & Poor's 500 closed at its lowest level since December 10, 2003. The Dow Jones Industrial Average also hit a new low for the year, notching its lowest close since November 28, 2003.
"We are seeing the cumulative effect of Hewlett-Packard, higher oil, higher rates, not such a great third-quarter outlook for companies and then the general economic numbers," said Brian Williamson, vice president of equity trading at The Boston Co Asset Management.
The Dow Jones industrial average ended down 123.73 points, or 1.24 percent, at 9,814.59. The Standard & Poor's 500 Index fell 12.56 points, or 1.17 percent, at 1,063.23. The technology-laced Nasdaq Composite Index lost 29.93 points, or 1.68 percent, at 1,752.49.
Oil closed at a new high of $45.50 a barrel as fighting in Iraq, a setback for Russia's biggest oil exporter and storms threatening production in the Gulf of Mexico all combined to raise concerns about fuel supplies.
High oil prices continue to dampen stock prices because of the negative impact they have on companies' profit margins and on spending by consumers on non-energy items.
Computer maker Hewlett-Packard issued a disappointing financial outlook, dealing another blow to tech investors after Tuesday's announcement from Cisco Systems Inc that inventories were rising and customers were cautious in their spending.
Trading was active, with 1.41 billion shares changing hands on the New York Stock Exchange, the same as the daily average for last year. About 1.61 billion shares were traded on Nasdaq, compared with a daily average of 1.69 billion last year.
Decliners outnumbered advancers 3 to 1 on the NYSE and on Nasdaq.
Crude prices on Thursday closed at $45.50 after peaking at $45.75, the highest level since NYMEX launched oil futures 21 years ago.
Retail data gave a mixed picture of consumer spending. While US retail sales rebounded in July, they posted a smaller-than-expected gain.
Retailers reporting on Thursday had mixed fortunes. Wal-Mart Stores Inc and Target Corp reported slightly better-than-expected earnings as demand for high-profit items like back-to-school clothing made up for sluggish summer sales.
Wal-Mart rose $1.02, or nearly 2 percent, to $52.65.
Target was up $1.48, or nearly 4 percent, to $41.90.
Among the technology shares, Hewlett-Packard tumbled after the Dow component posted disappointing quarterly earnings. HP also warned about fiscal fourth-quarter expectations.
Hewlett-Packard dropped $2.57, or about 13 percent, to $16.95, making it the biggest drag on the blue-chip Dow and the S&P 500.
Cisco fell 50 cents, or 2.73 percent, to $17.79.
After the bell, Dell Inc the world's largest personal computer maker, posted a higher quarterly profit as demand for personal computers and servers improved.
Dell shares closed down 45 cents to $33.12. In after hours trading they rose to $33.42 on the INET electronic brokerage system.
Comments
Comments are closed.