US stocks fell after Juniper Networks Inc lowered its profit forecast, boosting concern that more earnings disappointments from technology companies will follow before the quarter ends June 30.
The New York Stock Exchange had its slowest day this year after a failed software upgrade forced the exchange to shut down for 85 minutes, its first stoppage since 1998. NASDAQ Stock Market issues continued to trade.
During stocks' two-month rally, "the market got ahead of the fundamentals, and now we're sorting it out stock by stock," said Peter Skirkanich, president of Fox Asset Management, which manages US$2 billion in Little Silver, New Jersey.
"At least through July, the market will be vulnerable" to reports of falling profits.
The NASDAQ Composite Index fell 48.90, or 2.2 percent, to 2,215.10. The Standard & Poor's 500 Index lost 12.00, or 0.9 percent, to 1,264.96. The Dow Jones Industrial Average declined 113.74, or 1 percent, to 10,977.00, with 25 of its 30 members falling.
For the week, the NASDAQ rose 3.1 percent, its third advance in four weeks, and the S&P 500 climbed 0.3 percent. The Dow dropped 0.1 percent, its third straight weekly loss. The Nasdaq has rallied 35 percent from its 2 1/2-year low April 4, while the S&P 500 has gained 15 percent since then.
The suspension of NYSE trading from 10:10am to 11:35am New York time made "everything kind of grind to a halt," said Leo Smith, head of trading at Putnam Investments Inc, which manages US$400 billion. Traders were leery of doing business, even in NASDAQ stocks, without having information from stocks listed on the NYSE, Smith said.
Some 723 million shares changed hands on the Big Board, 40 percent below the three-month daily average. Four stocks fell for every three that rose on the NYSE, while three declined for every two that advanced on the NASDAQ.
* The NASDAQ Composite Index fell 48.90, or 2.2 percent, to 2,215.10.
* The Standard & Poor's 500 Index lost 12.00, or 0.9 percent, to 1,264.96.
* The Dow Jones Industrial Average declined 113.74, or 1 percent, to 10,977.00.
Some NYSE-listed stocks, including Dow and S&P 500 member International Business Machines Corp., didn't trade until the afternoon because of the exchange's software failure. IBM, which opened about 1:30PM, fell US$1.15 to US$116.10.
Juniper plunged US$8.61, or 18 percent, to US$38.02 after saying quarterly profit excluding some items will be at most 9 cents a share. The No. 2 maker of high-capacity data-traffic routers was expected to earn 24 cents, according to analysts surveyed by First Call/Thomson Financial.
The company cited the slowdown in the telecommunications industry.
Mobile-phone technology company Qualcomm Inc lost US$3.76 to US$61.24, phone-equipment maker Nortel Networks Corp declined US$0.60 to US$12.53 and JDS Uniphase Corp, the No. 1 producer of fiber-optic equipment, fell US$1.01 to US$16.05.
Intel Corp erased early gains, shedding US$0.47 to US$30.67.
The company said after exchanges closed yesterday that second-quarter sales will be "slightly below the midpoint'' of the US$6.2 billion to US$6.8 billion range it predicted in April, causing the stock to rally in after-hours trading.
Demand for microprocessors is stabilizing, helping to make up for lackluster sales of communications chips, Intel said.
Intel's report marked the first time in four quarters the company didn't slash forecasts during the period. While computer makers such as Hewlett-Packard Co. are backing off targets set just weeks ago, investors found Intel's remarks reassuring and took them as a sign business won't get worse.
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