Watch CBSN Live

U.S. Stocks Close Lower

Blue-chip stocks closed lower Tuesday as investors continued to reap profits from the market's five-month runup. The Dow Jones industrial average declined 34.24 points, or 0.4 percent, to 8,863.72.

But a strong day for many tech stocks helped lift the Nasdaq Composite index, while high-flying Internet stocks sizzled.

Enter a ticker symbol

Symbol Lookup
Technology shares may get a further boost Wednesday after one of the sector's bellwethers made encouraging comments after the close of Tuesday's trade. Intel (INTC) said it expects fourth-quarter revenues to be about 8 percent to 10 percent greater than in the third quarter. The semiconductor titan said it's seeing stronger-than-forecast demand for PC products. In Tuesday action, the stock tacked on 1 9/16 to 97 9/16. In afterhours activity, it traded 2 1/8 points higher.

"What I really like about this market is the action of the secondary stocks," said Frank Gretz, market analyst at Shields & Co.

There was little news on the economic front Tuesday to move the market. Meanwhile, several major retailers pulling the wraps off quarterly results. Looking forward, Federated Dept. Stores and Gymboree will release quarterly numbers Wednesday, while Dell Computer, Gap, and Kmart will unveil their statements Thursday.

The big event of the next week is the Federal Reserve's policy meeting Tuesday. Speculation about whether or not the central bank will produce another interest-rate cut has been rampant.

"[Federal Reserve Chairman Alan] Greenspan's speech last week guided investors to reduce expectations for a rate cut at the Nov. 17 Fed policy meeting due to the recovery of the liquidity crises that threatened U.S. markets last month," said Paul Rabbitt, president of Rabbitt Analytics.

"I disagree with the people that think the Fed is not going to do something next week," said Arthur Hogan, chief market analyst at Jefferies & Co. Inc. "They've shown no signals that they are definitely not going to continue on the path that they're on.

"For that reason, if you're excited about the market because oeasier monetary policy, you have to continue to like it."

The real excitement Tuesday was provided by the Internets, under manic accumulation. Wall Street analysts have been busy boosting target prices on a number of Web issues. Companies specializing in electronic commerce got a lift from Monday's new product release by Excite (XCIT). The search engine and content provider unveiled a virtual credit card wallet, which it hopes will speed up online shopping and alleviate security concerns regarding credit card use online.

On Tuesday, a cheery holiday sales outlook and positive analyst comments fueled more buying of e-commerce stocks, which turned in the best gains in the Web universe.

In Tuesday's market indicators:

  • The Standard & Poor's 500 Index fell 0.2 percent.
  • New York Stock Exchange losers beat winners by 3 to 2. Forty-five stocks printed new 52-week highs, with 30 stocks making new 52-week lows.
  • On the Big Board floor, turnover swelled 13 percent to 672 million shares.
  • The Nasdaq Composite advanced 0.1 percent. Advancing issues trailed decliners by 22 to 17 in the Nasdaq Stock Market, with 62 new highs and 53 new lows. Volume totaled 905 million shares.
  • The Russell 2000 Index of small-company stocks sank 0.4 percent.
  • The 30-year Treasury advanced 3/32, to yield 5.282 percent.

Among the companies in the news:
  • Wal-Mart Stores (WMT) fell 3/8 to 70 3/16. It reported third-quarter results of 45 cents a share, 2 cents richer than most Wall Street estimates. It earned 35 cents a year ago.
  • CompUSA (CPU) netted 9 cents a share in its fiscal first quarter, besting Wall Street estimates by 2 cents. It earned 25 cents in the year-ago period. But the computer retailer said it sees second-quarter same-store sales falling by the low single digits on a percentage basis. Same-store sales are sales at outlets open a year or more. On the warning, the stock retreated 3/16 to 14 7/8.
  • Dollar General (DG) eased 1 11/16 to 23 1/2 despite matching most projections with its third-quarter profits of 19 cents a share, 3 cents ahead of the year-ago tally. Same-store sales grew 4.2 percent in October.
  • Office supplies retailer OfficeMax (OMX) gained 1/2 to 10 3/4. Third-quarter earnings totaled 27 cents a share, 8 percent more than the same period a year ago, and in line with most views. Same-store sales increased 2 percent in the quarter.
  • McDonald's (MCD) cooked up a 4 1/8-point gain to 71 3/16. Merrill Lynch analyst Peter Oakes raised his 12-month price target to $90 apiece from $85. The analyst cited improving foreign operations and favorable currency translations as the reasons behind his change of heart.
  • Arco (ARC) dipped 1 3/16 to 68 9/16. Its chief executive said the company will "substantially" cut capital spending in 1999. The news from Arco is reflective of other such recent announcements by big oil & gas concerns. Cutbacks in exloration, drilling, and production hamper shares of oil & gas drilling and field service issues. Among field service entities, Schlumberger dipped 2 5/8 to 53 3/16, Halliburton 2 5/16 to 33 7/8, and Baker Hughes 15/16 to 21 1/8.
  • In the drilling group, Transocean Offshore surrendered 2 13/16 to 33 1/2, Diamond Offshore 2 9/16 to 28 7/8, Atwood Oceanics 2 1/16 to 27 11/16, Cliffs Drilling 2 5/8 to 23 5/16, Global Marine 11/16 to 12 1/4, and R&B Falcon 1 3/4 to 13 11/16.
  • K-tel International (KTEL) shot up 11 3/8, or 98 percent, to 22 15/16 on news that its K-tel Express online music and home video service will be added to the Microsoft Network's Shopping Channel, MSN Shopping.
  • Goldman Sachs upped its 12-month price objective on online auctioneer eBay to $150 from $90. The stock jumped 27 7/8, or 27 percent, to 130 7/8.
  • Among other plays on electronic commerce, put on 4 7/8, gained 2 7/16, or 21 percent, to 13 7/8; N2K vaulted 3 11/16, or 66 percent, to 6 1/2; and CDnow climbed 3 9/16, or 42 percent, to 12.
  • Elsewhere in cyberspace, Yahoo! bolted 11 13/16 to 176 9/16, CMG Information Services 5 to 79 1/4, MindSpring Enterprises 4 9/16 to 57 3/8, and Inktomi 14 3/8 to 130 1/8.

View CBS News In
CBS News App Open
Chrome Safari Continue