Wall Street opens lower on Microsoft report
Microsoft shares fall 8.6% after news of poor second-quarter performance and layoffs. The Dow slides 2.2%.
Reporting from New York — The stock market sell-off resumed after a one-day respite as glum economic data and a sobering earnings forecast from bellwether Microsoft Corp. once again rattled investors.
Microsoft shares slid 8.6% after the software giant reported disappointing second-quarter profit and said the uncertain economy will prevent it from predicting its sales and earnings for the rest of the year. The company also announced the elimination of 5,000 jobs, or 5% of its workforce.
Though scores of other companies have slashed jobs, the announcement of the first major personnel reduction by a company that has long stood out for its stability in the volatile technology sector underscored the long reach of the economic downturn. As of 8:20 a.m. Pacific, Microsoft shares were down $1.67 to $17.71.
Microsoft's slide pulled down the Nasdaq composite index, which fell 47.61 points, or 3.2%, to 1,459.46.
The Dow Jones industrial average was off 182.48 points, or 2.2%, to 8,045.62. The Standard & Poor's 500 index fell 19.88 points, or 2.4%, to 820.36.
The sell-off also was fed by the latest batch of troubling economic statistics.
Housing starts fell 16% to their lowest level since the government began tracking the data in 1959. Initial jobless claims rose 62,000 to 589,000.
Bank stocks resumed their descent, with the KBW bank index dropping 6%. Citigroup Inc. plummeted 17% while Bank of America Corp. tumbled 14%.
walter.hamilton@latimes.com
