Investors take profits using Kodak warning as a pretext. Early losses are limited.
June 18, 2003: 10:34 AM EDT
NEW YORK (CNN/Money) - U.S. stock markets sold off early Wednesday as profit taking on the back of Wall Street's extended rally and a profit warning by Dow component Eastman Kodak weighed in.
After days of climbing higher and higher, to their loftiest levels in about a year, all three main market indexes let some steam out and at around 10:00 a.m. ET the Dow Jones industrial average (down 68.00 to 9255.02, Charts), the Nasdaq composite (down 5.55 to 1662.89, Charts) and the S&P 500 index (down 5.07 to 1006.59, Charts) traded about 0.6 percent lower on average.
News that Kodak (EK: down $3.53 to $28.46, Research, Estimates) will miss its second-quarter earnings estimates took more than 11 percent from the stock's value and weighed on the industrial average.
The Dow also felt some pressure from Coca-Cola (KO: down $0.30 to $46.90, Research, Estimates), which fell for the second day in a row after admitting that some of the results of a beverage promotion at Burger King outlets in Virginia three years ago were rigged.
News of fairly strong earnings in the financial services sector failed to attract buyers to the stocks of the companies that reported their latest results. The financial sector digested quarterly reports from some big names early Wednesday.
Morgan Stanley (MWD: down $2.50 to $47.17, Research, Estimates) fell more than 3 percent even after the firm's second-quarter earnings fell a penny from last year, but beat Wall Street's average estimate by 3 cents a share.
Bear Stearns (BSC: down $2.56 to $79.92, Research, Estimates) shed 1.8 percent even after the company said its second-quarter earnings gained 50 cents over the same period last year, coming in at $2.05 a share, and soaring past analysts' average estimate of $1.72 a share, according to tracking firm First Call.
Also active in the morning were shares of PeopleSoft (PSFT: up $1.06 to $18.21, Research, Estimates) after Oracle (ORCL: down $0.03 to $13.32, Research, Estimates) raised its uninvited bid for the company to $19.50 a share from $16 a share and filed a lawsuit against PeopleSoft and its board. PeopleSoft, which already has a merger agreement with J.D. Edwards (JDEC: up $0.25 to $14.14, Research, Estimates) did not immediately respond.
Market breadth was negative and volume was robust. On the New York Stock Exchange, where 227 million shares traded, the advance/decline ratio stood at three to seven. On the Nasdaq, losers were ahead of gainers by six to four on volume of 410 million shares.
Bonds retreated as well, with the yield on the 10-year Treasury note climbing to 3.30 percent as its price fell 11/32 of a point. The dollar rose against other major currencies.
Oil fell, with Brent crude futures losing 25 cents to $26.42 a barrel in London. Gold shed $2.50 to $361.30 an ounce in New York.
European markets turned mixed after rising in the morning. Stocks in Asia closed their session mixed as well.
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