Wall Street hit by write-downs, earnings
NEW YORK (Reuters) - Stocks fell on Thursday after disappointing results from Comcast (CMCSA.O) and engine maker Cummins (CMI.N) fed worries about corporate profits, while fears of more credit losses hit financial shares.
Economic reports on housing, manufacturing and employment painted a picture of a weakening economy, adding to the sour mood, as did a surge in oil prices to another record above $90 a barrel.
American International Group Inc (AIG.N) led financial stocks lower on market rumors that the insurer may be facing a large securities write-down.
But AIG's stock retraced the bulk of its losses after CNBC reported that the rumors were "simply not true," helping the Dow and the S&P claw back some of their losses late in the session, as did a 2.4 percent rise in Microsoft MSFT.0 ahead of its earnings.
The rumors came a day after Merrill Lynch MER.N announced $7.9 billion of credit write-downs.
"Concerns over subprime issues are continuing to bang around out there, and you've seen earnings which have been coming in mixed, so that is weighing on investor sentiment," said Kurt Brunner, portfolio manager at the Swarthmore Group, in Philadelphia, Pennsylvania.
"There were rumors AIG may take a big write-down. Given what Merrill said yesterday about the size of the write-down, people are nervous and you are going to have these rumors."
The Dow Jones industrial average .DJI was down 3.33 points, or 0.02 percent, to end at 13,671.92. The Standard & Poor's 500 Index .SPX was down 1.48 points, or 0.10 percent, at 1,514.40. The Nasdaq Composite Index .IXIC was down 23.90 points, or 0.86 percent, at 2,750.86.
Right after the closing bell, Microsoft reported earnings that exceeded expectations and provided a strong outlook, driving its stock up another 11 percent in extended trade to $35.55.
FINANCIALS AND TECHS FALL
In the regular session, AIG's stock ended down 3.2 percent at $61.79. Merrill's stock lost 3.7 percent to $60.90 on the New York Stock Exchange.
Comcast Corp, the largest U.S. cable TV operator, posted a 54 percent drop in quarterly net profit. Comcast also lost more basic video subscribers than analysts had expected.
Shares of Comcast fell 10.8 percent to $21.28 on the Nasdaq.
Another drag on the Nasdaq was software maker Symantec Corp (SYMC.O), which gave a weak profit outlook, sending its shares down 12 percent to $18.50.
Cummins Inc, which makes diesel engines and power generators, reported a third-quarter profit that rose but still missed estimates, sending its shares down in their biggest one-day percentage decline in nine years. Cummins shares lost 16.6 percent to $111.56. Continued...
