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Technology stocks lead the market lower after Oracle earnings disappoint; Nike rises
NEW YORK (AP) ' Technology stocks led the market lower Wednesday after a disappointing earnings report from Oracle Corp.
The Nasdaq composite index, which is heavily weighted with technology companies, fell more than the rest of the market. It fell 41 points, or 1.6 percent, to 2,562 in late morning trading.
Broader market indicators had smaller declines. The Dow Jones industrial average fell 45 points, or 0.4 percent, to 12,058. IBM Corp. fell 3.4 percent, the biggest decliner among the Dow's 30 stocks. One day earlier the Dow had jumped 337 on good economic news from Europe and a surge in new home construction in the U.S.
The Standard & Poor's 500 index slipped 5.9 points, or 0.5 percent, to 1,235.
Oracle plunged almost 14 percent after the business software company said it was struggling to close deals. The results seemed to reinforce worries that businesses and the government may cut back on technology spending. Especially worrying was a weak 2 percent gain in new software licenses, a key sign of demand from other businesses. Oracle had predicted gains of as much as 16 percent.
Seven of the S&P 500's 10 industry sectors rose or were flat, while technology shares fell 1.7 percent. Safe-haven sectors like utilities, consumer staples, and health care rose. Financial shares were lower on lingering worries about Europe and whether leaders there will succeed in preventing a collapse of their 17-nation currency union.
Walgreen Co. sank 7.2 percent after the drugstore chain said quarterly profits fell more than 4 percent after a slow year for flu shots. Walgreen said it made no progress in staying with a pharmacy network that provides $5.3 billion of its annual revenue. Walgreen says filling those prescriptions is unprofitable.
Nike Inc. shares rose 1.9 percent after the shoemaker reported strong demand and higher prices for its shoes and clothing.
European markets gave up early gains. The British FTSE 100 index fell 0.7 percent and Germany's DAX fell 1 percent. New data showed extensive lending from the European Central Bank to European banks. Early optimism at the extent of the bank's assistance gave way to worries that it was only treating the symptoms of the debt crisis.