Wednesday, July 11, 2012

Stocks drop after several profit warnings

By msnbc.com news services

Stocks fell Tuesday as several profit warnings from the technology sector added to concerns the economy is losing steam.

The Dow Jones industrial average closed the day down 83 points after reversing an early rally.

Trading was choppy and volume was thin in keeping with the recent pattern. The S&P 500, which had its best three-day run of the year about a week ago, has fallen for the past three sessions on worries about the slowing economy.

"The market is slowly adopting to the reality that we are going into a global recession," said James Dailey, portfolio manager of TEAM Asset Strategy Fund in Harrisburg, Pennsylvania.

He noted that stocks of materials, energy and technology companies were down while defensive sectors were up.

Disappointing earnings reports and company outlooks that warned of lower profits and revenues were hitting the market, Daily said.

Advanced Micro Devices tumbled after the chipmaker slashed its outlook for second-quarter revenue following disappointing sales in China and Europe.

Applied Materials Inc sank after the chip-equipment maker said it expects to miss its full-year estimates and its third-quarter results will be at the low end of its previous outlook. The PHLX semiconductor index fell 2 percent.

U.S.-listed shares of Research In Motion Ltd fell. The BlackBerry maker's shareholders elected the company's slate of directors at its annual meeting - the first presided over by new Chief Executive Thorsten Heins, who faces an uphill battle to get the embattled company back on track.

Bank stocks, highly sensitive to developments in the euro zone, erased earlier gains to trade flat.

Alcoa Inc, a Dow component, kicked off the quarterly earnings season late Monday with revenue and profit that beat Wall Street's expectations.

Reuters contributed to this report.

Source: http://marketday.msnbc.msn.com/_news/2012/07/10/12666230-stocks-drop-after-several-profit-warnings?lite

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