IBM warning sends stocks sharply lower Monday

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Posted 10:13AM on Monday, April 8, 2002

NEW YORK - A profit and revenue warning from IBM drove stocks sharply lower Monday as investors feared that a business turnaround would be further delayed. IBM's disappointing outlook was a blow to investors who had hoped companies would post respectable first-quarter results and offer upbeat forecasts. Analysts said that in the absence of positive news, stocks can't rally as they did in late February and early March, when there was a string of reports suggesting the economy and business were strengthening. "Earnings estimates having done nothing since the beginning of the year and valuations (prices) are at the higher end of historic ranges. When you have a background of that, you need a steady diet of good news to fuel further advances in stocks. Today we don't have that," said Charles G. Crane, strategist for Victory SBSF Capital Management. In the first hour of trading, the Dow Jones industrial average was down 127.25, or 1.2 percent, at 10,144.39 after ending last week down 132.30, or 1.3 percent. The broader market was also lower. The Nasdaq composite index fell 28.69, or 1.6 percent, to 1,741.34, having declined last week 75.32, or 4.1 percent. The Standard & Poor's 500 index declined 9.50, or 0.9 percent, to 1,113.23. The Dow's biggest loser was IBM, which fell $9.75 toana's funeral. I want the queen to know Canadians support the royal family and the Commonwealth and she needs our support," she added. The huge, and unexpected, demand from the public to say farewell to the Queen Mother prompted officials to extend the opening hours of Westminster Hall until dawn on Tuesday -- just hours before the coffin is to be carried in procession to nearby Westminster Abbey for the funeral service. Some labor unions announced they had suspended protests out of respect to the Queen Mother. The Public and Commercial Services union said walkouts planned for Tuesday at navy bases in Scotland to protest planned layoffs would be put back to Friday. The Transport and General Workers' Union said it had called off a mass meeting organized to discuss the same issue. London's Heathrow airport said it would hold two minutes of silence Tuesday as a mark of respect, but air traffic won't be interrupted. At Westminster Abbey, florists were creating displays with more than 2,000 individual blooms chosen from the Queen Mother's favorite English flowers. Scores of lights have been installed in the 13th century building to enable a television broadcast of the funeral and security was being checked for the biggest official ceremony in Britain in several years. In addition to Laura Bush, wife of U.S. President George W. Bush, and the leaders of Australia, New Zealand and Canada, kings and queens, princes and dukes from other royal families around the world will travel to London for the service. The Queen Mother's coffin will be carried to the abbey to the sound of bagpipers and drummers. The procession will include nine senior royal family members, led by the Duke of Edinburgh, Queen Elizabeth II's husband, who will walk behind the coffin as it is borne by a gun carriage from Westminster Hall. As the funeral cortege moves slowly along The Mall Tuesday, two Spitfires and Britain's only remaining airworthy Lancaster bomber will fly low overhead. Before the service, the Abbey's Tenor bell will be tolled once a minute, 101 times in honor of each year of the Queen Mother's life.