Accessibility links

Wall Street Ends Week on a Sour Note - 2001-08-17

Friday's trading was down sharply following more bad news from the likes of Ford Motors and The Gap. But some respite may be on the way as early as Tuesday.

Friday was a day many on Wall Street will want to put behind them as quickly as possible. Each of the key indices lost ground.

The Dow Jones Industrial Average closed at 10,240, a loss of 1.5 percent. The technology-driven Nasdaq shed 3 percent to 1,867. The broad Standard and Poor's 500 index dropped to 1,161, a loss of 19 points.

The dramatic falloff in share value was blamed on prominent companies in three key sectors. Ford Motors announced its profits for the year would come in sharply lower than expected. That forced the company to announce it would lay off 10 percent of its North American workforce, between 4,000 and 5,000 people.

The GAP, one of the most actively traded companies, conceded its profits too would be lower than expected. The concern is that with the U.S. school year beginning soon, this is one of the busiest times of the shopping year. And Dell Computers added to the poor news when it confirmed decreased profits as well.

But there is hope for the coming trading week. The U.S. central bank will meet on Tuesday when it is expected to cut interest rates for the seventh time this year. The hope is that the cut will give the markets an incentive to turn around.

There was another setback on Friday for the software giant Microsoft. The company is trying to get a conviction for antitrust violations overturned. But a federal appeals court has unanimously ruled against Microsoft's request for a delay in the ongoing case. Now the company will proceed with its strategy of trying to get the United States Supreme Court, the highest court in the country, to hear the case.

Shares in Microsoft were down on the day, just as they were with Ford, The Gap and Dell Computers.

Hidden among all the bad news was a sign that consumer sentiment in the U.S. rose last month. The consumer sentiment index is simply a monthly measure of how people feel about the overall financial picture. Surprisingly, in the month of July, consumer sentiment actually rose. The conventional wisdom on Wall Street was that it would be unchanged at best. Although the rise was not dramatic, it does appear that confidence levels, if not necessarily the markets, are beginning to climb again.