Stock prices closed narrowly lower in moderate trading Thursday, as more profit warnings by technology companies further eroded Tuesday’s unprecedented Nasdaq rally.
After the close of New York trading, semiconductor giant Intel, blaming “large cancellations by customers worldwide,” revealed that its fourth-quarter revenues would be less than analysts expected. Computer-technology stocks lost ground in after-hours trading.
Early Thursday, Schaumburg-based Motorola issued a similar warning. Motorola closed down 6 cents, to $17.75, a 52-week closing low, after trading as low as $15.81 during the session.
So far in the past month, Intel, Motorola, Hewlett-Packard, Apple Computer, Gateway, Dell Computer and International Business Machines have warned of disappointing results.
Goldman Sachs cut its financial forecast for software giant Microsoft, which dropped more than 6 percent, to $53.12.
Separately, Internet portal Yahoo! fell nearly 7 percent, to a 52-week closing low, $34.94. W.R. Hambrecht downgraded the stock, citing weak online advertising.
Investors also turned their attention to Friday morning’s scheduled report by the Labor Department on job growth and unemployment in November.
The report is expected to show 140,000 to 150,000 new jobs were created last month, compared with 137,000 in October. The unemployment rate will hold at 3.9 percent or inch up to 4.0 percent, according to surveys of economists.
The Dow Jones industrial average slipped 47.02, to 10,617.36, on New York Stock Exchange volume of 1.11 billion shares. The number of winning stocks was slightly higher than the number of losers among NYSE-listed stocks.
The Standard & Poor’s 500 index lost 7.91, to 1343.55.
The Nasdaq composite index fell 43.84, or 1.6 percent, to 2752.66. In the last two days, the Nasdaq index has given back half of the record 274-point gain registered Tuesday after market-friendly comments by Federal Reserve Chairman Alan Greenspan.
Nasdaq volume totaled 1.75 billion shares, with losers outnumbering winners by a 3-2 ratio.
The Russell 200 index of small-company stocks dropped 2.44, to 461.10.
Treasury bonds edged higher ahead of Friday’s critical jobs report. The report has the potential of spooking stocks and bonds if it exceeds analysts’ expectations by too much in either direction.
A surprise drop in November job growth or increase in the unemployment rate will add fuel to the fear that the U.S. economy is headed toward a recession.
A surprise increase in November jobs or a further decline in the unemployment rate likewise could sink stocks and bonds, because such data would suggest that the Federal Reserve will not lower short-term interest rates soon.
Lower interest rates are one of the few silver linings in the current worry about slower economic growth and a declining rate of corporate profit expansion.
Long-term interest rates have fallen to levels not seen in more than 15 months, a move that could prompt new home buying and mortgage refinancing that will put cash in consumers’ pockets.
Traders also will examine the first December survey of consumer sentiment by University of Michigan researchers.
The last survey, reported Nov. 22, showed an unexpected increase in positive sentiment. The latest survey should reflect the length of the presidential election stalemate and the November market slide.
In a speech, Gary Gensler, undersecretary of the Treasury for domestic finance, said, “We believe the prospects for the economy and the economic expansion remain bright.” He added, “inflation remains well-behaved.”
Meanwhile, oil prices continued their recent decline in New York futures trading, despite cold weather in the north and a cessation of oil shipments by Iraq in a dispute with the United Nations.
Oil for January delivery closed down 50 cents a barrel, at $29.35.
Local news: Insurance broker Arthur J. Gallagher, Itasca, gained nearly 6 percent, to $63.19. The stock will be added to the Standard & Poor’s Midcap 400 index on Dec. 12.
– First Industrial Realty Trust, Chicago-based a real estate investment trust, boosted its quarterly dividend to 65.75 cents per share from 62 cents per share, payable Jan. 22 to shareholders of record Dec. 29.
