US STOCKS-Recession fears drive market lower
(Updates to early morning)
NEW YORK, Jan 23 (Reuters) - U.S. stocks fell for a sixth day on Wednesday as disappointing profit forecasts from Apple Inc (AAPL.O) and Motorola (MOT.N) added to recession worries, pushing the Nasdaq across the threshold that signals a bear market.
But the market halved its opening losses within the first hour of trading, as financial companies gained for a second day after the Federal Reserve slashed interest-rates by 75 basis points in an emergency move to forestall a recession.
The S&P financials index .GSPF rose 1.9 percent.
Apple's shares fell 12 percent after it forecast a quarterly profit below analysts' expectations and posted disappointing holiday-season iPod shipments. For details, see [ID:nN22551914]. Mobile phone maker Motorola Inc (MOT.N) fell 10 percent after it forecast a loss for the current quarter and said it expects a challenging year. [ID:nN23603946].
The news from Apple, Motorola and others underscored concerns about the health of the U.S. consumer. In addition, Coach Inc's (COH.N) chief executive said consumers in the United States are already acting as if they were in a recession.
"The market fell because of bad news on Motorola and Apple," said Giri Cherukuri, head trader at OakBrook Investments LLC, in Lisle, Illinois. But the Fed rate cut was helping financials and keeping losses in check, he added.
The Dow Jones industrial average .DJI was down 144.69 points, or 1.20 percent, at 11,827.88. The Standard & Poor's 500 Index .SPX was down 16.34 points, or 1.25 percent, at 1,294.16. The Nasdaq Composite Index .IXIC was down 37.87 points, or 1.65 percent, at 2,254.40.
Stocks in Europe were also sharply lower.
The Nasdaq crossed the threshold of a bear market, which is defined as falling 20 percent or more from a record closing high. But to confirm the onset of a bear cycle, a prolonged period in which investment prices fall, the index needs to end at least 20 percent off its closing peak. Both the S&P 500 and Dow were also near bear market levels.
Commodity and energy companies were not spared in the sell-off. Gold and copper miner Freeport-McMoRan's (FCX.N) shares dropped 7.2 percent to $75.61 after the company posted a lower fourth-quarter profit, while ConocoPhillips (COP.N) fell 2.1 percent to $69.65 after it gave a weak production outlook.
Apple shares fell to $136.37, with other major technology companies, including Google Inc (GOOG.O), following in its wake. Google shares fell 3.8 percent to $562.23.
Motorola shares fell to $10.37.
Citigroup cut its year-end targets for the benchmark S&P 500 and the Dow Jones industrial average. Tobias Levkovich, chief U.S. equity strategist at Citigroup, said profit growth was unlikely to underpin equities in the near term as concerns about a recession mount. (Editing by Kenneth Barry)
