Earnings win direction
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If the stock market had been a battle zone on Wednesday, with crummy earnings butting against slightly better than expected U.S. economic data, the earnings won the day.
The Dow Jones industrial average closed at 7956.66, down 121.70 points, or 1.5 per cent - after moving in a tight, though mostly positive trading range until the early afternoon. The broader S&P 500 closed at 832.23, down 6.28 points, or 0.8 per cent.
Financials were mostly lower, with Bank of America Corp. falling 11.3 per cent to a new multi-year low and Wells Fargo & Co. falling 5.8 per cent on renewed uncertainty over the Obama administration's big fix for the sector, and whether it will work.
But high-profile consumer stocks that had reported their quarterly results were the big targets of the selloff. Kraft Foods Inc. fell 9.2 per cent after it reported a 72 per cent drop in fourth quarter earnings that missed expectations. Walt Disney Co. fell 7.9 per cent after its quarterly earnings dipped 32 per cent, also coming in below expectations.
In Canada, the S&P/TSX composite index - which had missed out on the late-day gains by U.S. stocks on Tuesday - enjoyed the opposite problem on Wednesday, closing at 8693.09, up 64.46 points, or 0.8 per cent.
Commodity producers were the main reasons for the gains, even though moves by gold and crude oil were hardly eyebrow-raising. Gold hit $902.20 (U.S.) an ounce, up $9.70. Crude oil fell 46 cents to $40.32 a barrel. Still, Barrick Gold Corp. rose 3.7 per cent, Goldcorp Inc. rose 4.9 per cent and Suncor Energy Inc. rose 3.3 per cent. As well, Potash Corp. of Saskatchewan Inc. rose 4.7 per cent.
Meanwhile, financials were weak, with Bank of Montreal falling 3 per cent and Toronto-Dominion Bank falling 1.6 per cent.
Copyright 2001 The Globe and Mail
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