Stocks Fall Sharply as Oil Tops $55 Per Barrel
October 22, 2004
By THE ASSOCIATED PRESS
Filed at 5:44 p.m. ET
NEW YORK (AP) -- Worried investors sent stocks tumbling
Friday as crude oil futures topped $55 per barrel and tepid
earnings from Microsoft Corp. and the Coca-Cola Co. offset
Google Inc.'s strong third-quarter report. The Dow Jones
industrials fell nearly 108 points, while the Nasdaq
composite index dropped 2 percent. The major indexes
finished the week mixed.
Oil prices again pressured the market, casting doubt not
only on fourth-quarter earnings, but also on the health of
the economy as a whole. A barrel of light crude was quoted
at $55.17, up 70 cents, on the New York Mercantile
``These oil prices are really going to bite the consumer at
some point. Heating oil is up, it's supposed to be a very
cold winter in the Northeast, and lower and middle income
people are going to pay,'' said Russ Koesterich, U.S.
equity strategist at State Street Corp. ``Combine that with
a total lack of fundamentals in the big name stocks, and
there are very few places left to hide for investors.''
Shares of Google surged in early trading as the online
search giant doubled both revenues and profits from a year
ago. Like its initial public offering two months ago,
Google was one of the few bright spots in an otherwise
The Dow Jones industrial average fell 107.95, or 1.1
percent, to 9,757.81, setting a new low for the year to
date and posting its lowest reading since Nov. 24.
Broader stock indicators also were substantially lower. The
Nasdaq composite index lost 38.48, or 2 percent, to
1,915.14, its biggest one-day drop since Aug. 6. The
Standard & Poor's 500 index was down 10.75, or 1 percent,
at 1,095.74, its lowest close since Aug. 23.
The Dow and S&P 500 lost ground for the third straight
week, as the continued rise in oil prices and middling
earnings reports again sapped confidence from investors. A
wait-and-see attitude also pervaded the market, with major
economic reports, including the first reading of the third
quarter's gross domestic product, and the presidential
However, the Nasdaq managed a slim gain as technology
earnings outpaced those of other sectors.
For the week, the Dow lost 1.77 percent, and the S&P
dropped 1.12 percent, while the Nasdaq gained 0.19 percent.
Google's earnings impressed analysts, with Prudential
raising the company's target stock price to $200 early
Friday. Google skyrocketed $23.05, or 15.4 percent to
$172.43, but other major technology stocks stole any
momentum Google might have generated.
``You've got one darling here surrounded by a bunch of
less-than-hopefuls, and that's not going to boost anything
other than the darling,'' said Bryan Piskorowski, market
analyst at Wachovia Securities. ``With oil up and nobody
really stepping out with earnings other than Google, we're
Dow component Microsoft slipped 82 cents to $27.74 after
beating Wall Street estimates by 2 cents per share before
one-time charges. Analysts were concerned about a dropoff
in long-term contract revenues, a possible sign that demand
for the company's software was waning as companies waited
for a long-delayed update of the Windows operating system.
Online retailer Amazon.com Inc. missed its third-quarter
earnings forecasts by a penny per share, even as the
company saw its profits triple from a year ago. A
disappointing 2005 sales outlook further disappointed
investors. Amazon.com tumbled $4.87, or 12.3 percent, to
Coca-Cola, also a Dow component, slid 58 cents to $38.90
after posting a 24 percent drop in quarterly profits on
flat revenues. However, the soft-drink giant managed to
beat reduced Wall Street estimates by 3 cents per share.
Fast-food operator Wendy's International Inc. posted a 4
percent rise in its third-quarter profits, but issued a
lower outlook for its full 2004 results. Wendy's was up 93
cents at $32.73.
Declining issues outnumbered advancers by about 9 to 5 on
the New York Stock Exchange, where preliminary consolidated
volume came to 1.84 billion shares, compared with 2.06
billion on Thursday.
The Russell 2000 index of smaller companies was down 8.89,
or 1.5 percent, at 567.77.
Overseas, Japan's Nikkei stock average rose 0.63 percent.
In afternoon trading, Britain's FTSE 100 closed down 0.04
percent, France's CAC-40 lost 0.01 percent for the session,
and Germany's DAX index gained 0.03 percent.
The Dow Jones industrials ended the week down 175.57, or
1.77 percent, finishing at 9,757.81. The S&P 500 index fell
12.46, or 1.12 percent, to close at 1,095.74.
The Nasdaq gained 3.64, or 0.19 percent, during the week,
closing Friday at 1,915.14.
The Russell 2000 index, which tracks smaller company
stocks, closed the week 1.64, or 0.29 percent, lower at
The Dow Jones Wilshire 5000 Composite Index -- an index
that measures 5,000 U.S. based companies-- ended the week
at 10,748.04, off 90.63 points from last week. A year ago,
the index was 9,983.50.
On the Net:
New York Stock Exchange: http://www.nyse.com