Stocks took a drubbing on Wall Street yesterday in a broad sell-off linked to jitters over an uncertain outlook for corporate profits.
The Nasdaq tumbled 108.71 (2.83 per cent) to close at 3,726.52, the Dow Jones fell 118.48 (1.08 per cent) to 10,808.52 and the Standard and Poor's 500 slid 21.30 (1.45 per cent) to 1,444.51.
On the bond market, the yield on the 10-year bond edged up to 5.871 per cent from 5.833 per cent on Friday and, on the 30-year bond, to 5.956 per cent against 5.895 per cent. The rise in yields translates into a decline in bond prices.
Morgan Stanley senior trader Michael Lyons said that a continuing stream of profit warnings is hurting investors' confidence in the ability of multinationals to sustain the recent rapid growth in earnings. "It's the same old worries about profit warnings," he said
For example, the market was hurt by two major profit warnings, one by Gillette and the other by Rockwell. Mr Lyons noted that the major reason for such companies' inability to meet expectations is the weakness of the euro and unusually high crude oil prices.
