The Dow Slides Again


The Dow Jones Industrial Average slid for the second day in a row today, on downbeat economic reports, and worries about sequestration. The blue chips fell 47 points, or 0.34%, in the session.

Initial unemployment claims climbed from a five-year low a week ago to 362,000, 4,000 more than economists had anticipated. Elsewhere, the Philadelphia Fed's manufacturing index dropped sharply in February -- to (12.5), from (5.8) the month before. The market had expected a slight expansion from the widely watched report, because it is one of the first indicators of manufacturing activity for the month. Finally, existing home sales in January totaled 4.92 million, slightly below expectations, but there was good news in the report, showing inventory of homes for sale at a 13-year low, which should lead to more construction.

Despite the Dow's drop today, there were still a number of big gainers on the index. Hewlett-Packard moved up 2.4% during the session, and then another 6.1% once it reported earnings after hours. Revenue fell 5.6% at the struggling PC maker, and earnings per share dropped 16%, to $0.63. Revenue beat estimates, while earnings missed, but HP's current-quarter guidance was better than expected, at $0.80-$0.82, against estimates of $0.77. CEO Meg Whitman said the situation was improving, explaining, "The turnaround is on track and we did better than we expected we would." She also said the company would "reallocate resources from PCs to mobile."

Wal-Mart also moved higher on its earnings report, finishing the day up 1.5%. The world's biggest retailer said profits grew 8.6% in the fourth quarter, in part due to a lower tax rate, and EPS was up 11%, to $1.67, beating estimates of $1.57. Sales grew 3.9%, to $127.1 billion, slightly below expectations. The market seemed to ignore Wal-Mart's downbeat expectations, as the payroll tax hike has eaten into their customers' disposable income. For the coming quarter, the retailer expects per share profits between $1.11 and $1.16, while the street had projected $1.18.

Finally, Boeing shares were up 1.6% on hopes for a fix for its battery problems in its new 787 Dreamliner, as it will present a formal plan to the Federal Aviation Administration.

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