Dow Loses 400 Points In Three Days

[Janice]

Wall St. walloping, day 2
Major gauges give up midday attempt to staunch losses, turn lower again; record oil prices, Mideast, earnings worries prevail.
By Alexandra Twin, CNNMoney.com senior writer
July 13 2006: 1:47 PM EDT

Stocks slumped anew Thursday afternoon, abandoning a midday attempt to stem losses, as the mix of record oil prices, geopolitical unrest and concerns about corporate profits proved too much for investors.

The Nasdaq composite (down 20.14 to 2,070.10, Charts) tumbled 1 percent with about 2-1/2 hours left in the session. The tech-fueled index had attempted to recover just before midday due to some gains in chips and other recently beaten-down shares.
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The Dow Jones Industrial average (down 117.66 to 10,895.52, Charts) fell 1.2 percent. The broader Standard & Poor's 500 (down 10.62 to 1,247.98, Charts) index was off by 0.8 percent.

Stocks have been in a general downturn since late May on a mix of concerns, coupled with what some say is the ending of the 3-1/2 year old bull market.

The pressure on investors seems to have intensified in the last few days, due to the onslaught of challenges, both national and abroad.

"Record energy prices, instability in the Middle East, some weaker-than-expected earnings in technology and worries about the strength of the economy going forward are all creating headwinds for the stock market," said Michael Sheldon, chief market strategist at Spencer Clarke.

The stock market is also heading into what is typically the toughest time of year - mid-summer to early fall.

"It's hard to see in the short term what could turn the market around and lead to a new bull market," Sheldon said.

U.S. light crude oil for August delivery rose $1.65 to an intraday record $76.60 on the New York Mercantile Exchange.

Oil has been climbing steadily of late amid escalating geopolitical unrest, including increased violence between Israel and the Hezbollah in Lebanon, bombings in India Tuesday and blasts Thursday to a Nigerian pipeline.

A fire in a Venezuelan refinery and Wednesday's surprisingly large drop in weekly U.S. crude oil inventories added to worries about the commodity.
On the move

On the corporate front, several major companies suffered analyst downgrades ahead of the first big week for second-quarter earnings.

Merrill Lynch cut its rating on Dow component Wal-Mart Stores (down $1.02 to $44.13, Charts) to "neutral" from "buy," citing concerns about slowing sales. Shares of the retailer fell more than 2 percent.

CIBC World Markets cut its rating on fellow Dow stock Walt Disney (down $1.20 to $28.71, Charts), sending its shares down 4 percent.

However, declines were pervasive. Only 3 of 30 components of the Dow industrials were in the black. Dow losers included General Motors (down $0.74 to $28.88, Charts), Honeywell (down $0.70 to $38.20, Charts), Merck (down $0.88 to $35.82, Charts) and Alcoa (down $0.55 to $31.50, Charts).

Software leader SAP (down $3.67 to $46.67, Charts) warned that second-quarter software license sales and overall revenue will miss forecasts, sending another chill through the vulnerable technology sector. SAP fell 7 percent in unusually active New York Stock Exchange trade.

Semiconductor maker Cree (down $5.04 to $17.55, Charts) slumped 22 percent after warning that its fiscal fourth-quarter profit would miss forecasts.

However, the broader semiconductor sector crept higher, bouncing after a recent pummeling. The turnaround helped the Nasdaq composite trim losses.

PC-maker Dell (down $0.38 to $22.00, Charts) announced a plan to cut back on mail-in rebates that it says will simplify its pricing structure. Shares initially climbed 1 percent on the news, but soon turned negative.

On the upside, PepsiCo and Marriott International both reported higher-than-expected quarterly earnings. PepsiCo (up $1.01 to $62.11, Charts) shares added 1.5 percent and Marriott (down $0.71 to $36.66, Charts) shares lost 2 percent.

Market breadth was negative. On the New York Stock Exchange, losers topped winners nearly 3 to 1 as 1.02 billion shares changed hands. On the Nasdaq, decliners beat advancers three to one on volume of 1.3 billion shares.

COMEX gold for August delivery rose $3.10 to $654.30.

Treasury prices rose modestly, lowering the yield on the benchmark 10-year note to 5.09 percent from 5.10 percent late Wednesday. Bond prices and yields move in opposite directions.

The dollar weakened against other major currencies, after spiking Wednesday in response to the narrower-than-expected May U.S. trade deficit.

[wx247]

Dow is down over 150 points now... crude oil was at 76.78 last time I checked.

[Janice]

This is only the beginning, I am sure. And our enemies are sure watching.

[Janice]

http://money.cnn.com/2006/07/14/markets ... tm?cnn=yes

[wx247]

Crude oil closes at $77.03. Not as bad as it was earlier in the day, but still not too good.