NEW YORK – Stocks closed in negative territory Monday after top Wall Street analysts cut their 2001 earnings estimates for Standard & Poor's 500 companies, taking the wind off investors' hopes for profit recovery.
``We think a very cautious approach to the U.S. equity market makes a lot of sense until there are unambiguous signs of a real earnings recovery,'' J.P. Morgan Chase & Co. chief portfolio strategist Doug Cliggott told clients in a note cutting the outlook for the S&P 500.
Roughly 80 percent of the Standard & Poor's 500 companies posted their quarterly results so far and offered few hints of an imminent pick-up in corporate earnings. Adding to the pressure on the market, UBS Warburg's Ed Kerschner, Credit Suisse First Boston's Tom Galvin and Cliggott trimmed their 2001 earnings outlook for the S&P 500 as the nation's economy struggles to pick up speed.
The Dow Jones industrial average lost 14.95 point to end the day at 10,401.72, while the technology-dominated Nasdaq Composite Index fell 11.25 to 2,017.82. The broader Standard & Poor's 500 Index dropped 1.30 to 1,204.52.
``There's still no sense of when the profit pressure is going to ease,'' said Charles Pradilla, chief investment strategist at SG Cowen Securities. ``But right now it looks like the turn in both the economy and profits probably won't occur well into the first quarter of 2002. That means the market is going to be slow and trendless for a while.''
Desktop publishing software provider Adobe Systems Inc. dropped $2.52 to $40.54, a 5.9 percent loss. The company said it should meet its quarterly earnings targets but could take a hit on revenue because of weaker-than-expected conditions across its product lines.
Tyson Foods was also off, dropping 52 cents to $9.88, despite beating quarterly estimates. Investors were dissatisfied with the poultry producer's indications that business remains disappointing.
Aviron fell $11.40, or more than 27 percent, to $29.40, ranking as the largest percentage loser on the Nasdaq. The pharmaceutical company said it will not be able to launch its nasal spray vaccine in time for the upcoming flu season after a U.S. regulatory panel voted against recommending approval of the spray, citing safety concerns.
But Swedish mobile phone company Ericsson perked 24 cents to $5.09 on the Nasdaq. Sweden's Dagens Industri newspaper said an internal Ericsson report showed the company was on course to exceed its savings target in information technology as well as research and development.
U.S. cell phone maker Motorola Inc. gained 10 cents to $19.10. Finland's Nokia Corp., the world's largest mobile phone maker, rose 30 cents to $21.50.
Heller Financial Inc. jumped $17.10 to $53 after GE Capital, the huge finance arm of conglomerate General Electric Co., said it plans to buy Heller for about $5.3 billion in cash to expand its sizable commercial-finance operations. GE, a Dow component, dipped 55 cents to $44.10.
Wall Street rewarded pizza restaurant chain Papa John's for better-than-expected results, sending its stock up 75 cents, or 3 percent, to $24.75.
Investors are waiting for signs that the Federal Reserve's six interest-rate cuts this year are adding momentum to the nation's sluggish economy. The central bank meets on Aug. 21, when it is widely expected to cut rates for the seventh time this year in a bid to revitalize the world's largest economy.
``I think you can safely say that the weakness in the market represents a lack of conviction,'' said Richard Cripps, chief market strategist at Legg Mason Wood Walker. ``At some point, the confidence level in forward earnings and in the economy will have improved, but you don't know when that will be until after it has happened.''
Advancing issues led decliners 8 to 7 on the New York Stock Exchange in quiet trading. Volume was 902.95 million shares, compared with 1.01 billion Friday.
The Russell 2000 index fell 0.34 to 484.67.
Overseas, Japan's Nikkei stock average fell 1.9 percent. European stocks fared better. Germany's DAX index rose 0.7 percent, Britain's FT-SE 100 advanced 0.8 percent, and France's CAC-40 gained 1.3 percent.
-- The Associated Press and Reuters contributed to this report.