Qualcomm shares tumbled 14.2 per cent to $40.48 and Motorola slid 12.4 per cent to $6.48 after both companies’ earnings and outlooks fell short of expectations.
“They did exactly what was supposed to happen with the type of earnings report that they had,” said Jonathan Corpina, senior managing partner of Meridian Equity Partners in New York. Several bellwethers this quarter have beaten modest expectations and still have been viewed unfavourably by the market, so these dismal reports were viewed even more negatively.
After the closing bell, Microsoft edged up 1,7 per cent to $29.64 after reporting quarterly profit rose 60 per cent, aided by solid sales of its new Windows 7 operating system.
Also after the close, Amazon.com added 2.8 per cent to $129.59 after the online retailer reported fourth-quarter results that blew past Wall Street’s profit estimates and forecast stronger-than-expected revenue for early 2010.
The Dow Jones industrial average fell 115.70 points, or 1.13 per cent, to end at 10,120.46. The Standard & Poor’s 500 index lost 12.97 points, or 1.18 per cent, to 1,084.53. The Nasdaq Composite index declined 42.41 points, or 1.91 per cent, to close at 2,179.00.
Earlier, news that Athens will not be able to service its heavy debt unnerved investors and prompted them to shun riskier investments, including stocks, although the country’s prime minister said it has not asked for a bailout.
“Investors are looking headline to headline to headline,” Corpina added. ”It was China and bank reform last week. It was Obama’s speech this week, and now today, it’s Greece.”
Stocks added to losses during the regular session following news that US Federal Reserve Chairman Ben Bernanke was confirmed by the US Senate, causing the benchmark S&P 500 to close below the key support level of 1,085.
Declining stocks outnumbered advancing ones on the NYSE by a ratio of almost 3 to 1.