Encouraging economic data wasn't enough to offset earnings anxiety this week as investors sold off blue-chip and technology stocks ahead of the next onslaught of earnings reports. At this point, traders seem content to leave their cash on the sidelines.
For the week, the Dow Jones industrial average fell 293 points to 10,927.00 while the Nasdaq composite shed 61 points to close at 3,835.01.
Earlier this week, the government reported that August's Consumer Price Index came in well below consensus expectations for a 0.2-percent rise. But traders said it had already been largely priced into the market
"With energy prices going up, that's a component of inflation that the Fed can't control, and it's going to make everybody concerned, no matter what comes out," said Edgar Peters, chief investment officer at Panagora Asset Management.
The Producer Price Index offered even more proof that inflation is firmly in check, falling 0.1 percent.
Some important earnings reports hit the wire this week, but even better-than-expected sales and profits weren't enough to ignite the market.
Database software giant Oracle (Nasdaq: ORCL) shattered analysts' estimates, earning $501 million, or 17 cents a share, on sales of $2.3 billion.
First Call Corp. consensus expected it to return a profit of 13 cents a share in the quarter.
Salomon Smith Barney, Banc of America, Deutsche Banc Alex. Brown and Lehman Brothers all raised estimates on the stock Friday, although they all expressed disappointment with the applications business.
Applications sales grew 42 percent to $156 million from the year-ago period, and revenue from Oracle's core database business increased 32 percent to $585 million.
Salomon wrote that it expected 57 percent growth in the applications business, and earlier this week, Chris Shilakes of Merrill Lynch projected 70 percent growth in applications, driven by the 11i Web suite. Salomon and Deutsche Banc both raised fiscal 2001 earnings estimates to 98 cents from 90 cents. Salomon is predicting earnings of $1.13 per share for 2002, while Deutsche Banc is expecting $1.14 a share.
Lehman Brothers upped its fiscal 2001 earnings estimate to $1.00 from 93 cents per share, and its fiscal 2002 estimate to $1.30 a share, up from $1.11.
Red Hat (Nasdaq: RHAT) also reported, posting a loss of $1.9 million, or a penny a share, on sales of $18.5 million.
Analysts were expecting a loss of 2 cents a share.
Looking ahead to next week, investors will be watching for earnings from Jabil Circuit (NYSE: JBL) and Engage Technologies (Nasdaq: ENGA).
First Call Corp. consensus expects Jabil to earn 24 cents a share in its fourth quarter.
Last quarter, it raked in $38.2 million, or 21 cents a share, on sales of $965.8 million.
Engage Technologies is expected to report a loss of 28 cents a share.
Last quarter, it lost $38.3 million, or 22 cents a share, on sales of $58.7 million.