US stocks: Markets lower as eBay, JP Morgan disappoint

NEW YORK - Stocks fell on Wednesday after bank JPMorgan Chase & Co. and drug maker Pfizer Inc. reported disappointing earnings.

A lacklustre outlook from cell-phone maker Motorola Inc. also stoked concerns about weak technology spending.

Online marketplace eBay Inc. plummeted 10 per cent after hours to US$93.09 from US$103.05, its Nasdaq close, after reporting earnings that missed Wall Street's forecast.

"Earnings have been the backbone of the market and investors are extrapolating the disappointing results and are worried," said Milton Ezrati, senior economic strategist at Lord Abbett & Co.

The Dow Jones industrial average was down 88.82 points, or 0.84 per cent, to end at 10,539.97, with 27 of the 30 Dow components closing lower. The Standard & Poor's 500 Index was down 11.35 points, or 0.95 per cent, to finish at 1,184.63. The technology-laced Nasdaq Composite Index was down 32.45 points, or 1.54 per cent, to close at 2,073.59.

Trading was active, with 1.5 billion shares changing hands on the New York Stock Exchange, just above the 1.46 billion daily average for last year. About 2.23 billion shares were traded on Nasdaq, above the 1.81 billion daily average last year.

The number of declining stocks outnumbered those rising by about 2-to-1 on the NYSE and more than 2-to-1 on Nasdaq.

Motorola tumbled 7 per cent, or US$1.23, to US$16.20, a day after it said first-quarter earnings would be lower than average Wall Street analysts' estimates.

Meanwhile, shares of Dow component JPMorgan Chase & Co., the No. 2 US bank, slipped 1.5 per cent, or 56 cents, to US$37.84 after its fourth-quarter earnings missed Wall Street expectations.

The discouraging trend continued after the closing bell when eBay reported a profit that missed the Street's forecast and issued a forecast for 2005 revenue and earnings that were below estimates.

The online marketplace also gave an earnings forecast for the current first quarter that was below analysts' consensus forecast.

"I think investors are just used to eBay beating the Street numbers -- not just by a little, but by a lot," said Stephen Leeb, president of Leeb Capital Management. "The eBay earnings will hit every other major internet stock."

In another disappointment after the closing bell, Qualcomm Inc. fell to US$38.61 from its Nasdaq close at US$41.07 after the wireless technology company gave a second-quarter earnings forecast that was below some analysts' estimates. Qualcomm, however, reported a higher profit for its fiscal first quarter on strong demand.

US stock futures moved sharply lower as earnings news poured in after the bell.

During the regular session, Dow component Pfizer Inc., the world's largest drug company, fell 1.7 per cent to US$24.88 after saying fourth-quarter earnings rose slightly below analysts' expectations.

International Business Machines Corp. slipped 1.9 per cent, or US$1.80, to US$93.10, a day after it posted quarterly profits that beat Wall Street targets. A chunk of its growth was due to favorable currency effects.

Only three Dow components finished Wednesday's session higher: McDonald's Corp. inched up 2 cents, or 0.06 per cent, to US$31.62, while 3M Co. edged up 15 cents, or 0.18 per cent, to US$82.17, and Procter & Gamble gained 94 cents, or 1.69 per cent, to US$56.68.

In other news, Maytag Corp. fell 10.4 per cent to US$16.73. Electronics retailer Best Buy Co. said it would stop selling Maytag-branded major appliances to make space for more popular brands.

Weekly oil inventory data will be released at 5 p.m. EST, delayed from the usual 10:30 a.m. release time because of the holiday on Monday. NYMEX February crude futures fell 83 cents to settle at US$47.55 a barrel, before this afternoon's release of weekly data. The forecast calls for an increase in domestic stockpiles of distillate fuels and crude.

- REUTERS