NEW YORK – Stocks dipped Wednesday as investors mulled concerns about weaknesses in the banking sector and a gloomy earnings forecast from technology giant Hewlett-Packard.
The blue chip Dow Jones industrial average closed down 105.60 points at 11,070.24 Wednesday. The technology-heavy Nasdaq index was down 15.93 points to close at 2,217.73, while the broad Standard & Poor's 500 index was down 13.54 points at 1270.03.
Financial services heavyweight J.P. Morgan Chase said it expects lower trading revenues in the quarters ahead, while leading computer maker H-P warned the slowdown in information technology was becoming global, eroding some hopes for a smooth recovery in the technology industry. J.P. Morgan Chase's shares were down $1.66, or 3.42 percent, to $46.84, while H-P's stock slumped $1.34, or 4.46 percent, to $28.71.
The announcements spooked traders already nervous ahead of the so-called "confession period," when firms announce their profits and revenues will fall short of expectations.
"Earnings concerns are going to continue to bedevil the market," said Jack Shaughnessy, chief investment strategist at Advest. "Companies in the middle of June begin to make announcements about second-quarter earnings, and those announcements may not be very positive."
The economic slowdown, which has been unforgiving in some sectors, dragged down financial stocks. Bank One slipped 9 cents to $38.96 after UBS Warburg downgraded its rating on the stock.
In other blue chip sectors, such as oil and steel, profit taking was apparent. Oil services giant Exxon Mobil fell $2.15 to $89.40. Halliburton fell $2.40 to $45, giving up gains made Tuesday when OPEC agreed to leave its official oil output unchanged for the time being.
Likewise, steel stocks fell after soaring Tuesday when President Bush said his administration will seek approval for limits on steel imports. USX's U.S. Steel Group fell 67 cents to $21.07.
Hewlett-Packard weighed down much of the tech sector the company announced it now expects revenue to be flat or down 5 percent for the fiscal third quarter that ends July 31.
Investors were particularly on edge with computer chip giant Intel Corp. scheduled to give a preliminary report on the second quarter, which ends on June 30, on Thursday. Intel was up 9 cents at $29.82.
Network computer maker Sun Microsystems Inc. was the Nasdaq's most heavily traded share, up 59 cents at $17.61. Traders cited a research note from Goldman Sachs, which said that while the pain caused by "externally induced slowing, amplified by some internal miscues" is not behind the company, the worst of it is.
Last week, Sun cut its current quarter profit forecast and said sales would be 10 percent or more below Wall Street estimates because of economic weakness in Europe.
Specialty software maker Citrix Systems Inc. said it sees "modest acceleration'' in its core business growth and that growth in the current quarter will be stronger than expected. It also buoyed the Nasdaq market with a gain of $4.25 to $27.96, a rise of almost 18 percent.
Some tech shares that posted losses were Dell Computer, down 96 cents at $25.26, and Cisco Systems, off 78 cents at $20.76.
After a stock market advance that started Thursday, Wednesday's downturn reflected how confused investors are. They are worried about how long it will take for business to rebound while hoping that the worst of the slowdown is over.
Declining issues outnumbered advancers slightly more than 3 to 2 on the New York Stock Exchange, where volume was 1.06 billion shares, compared with 1.11 billion on Tuesday.
The Russell 2000 index, the barometer of smaller company stocks, fell 3.90 to 512.58.
Overseas market were mixed Wednesday. Japan's Nikkei stock average slipped 0.1 percent. Britain's FT-SE 100 and France's CAC-40 were each off 0.3 percent, and Germany's Germany's DAX index fell 0.8 percent.
Reuters and the Associated Press contributed to this report.
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