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Disappointing Technology Earnings Spur Decline

Associated Press
Friday, January 21, 2005; Page E03

NEW YORK, Jan. 20 -- Nervous investors overlooked strong earnings from Citigroup and a possible merger of two department store giants, and pushed stocks substantially lower Thursday on disappointing earnings from the technology sector.

Investors were troubled as perennial market favorite eBay missed its earnings target for the fourth quarter and said its outlook for the current quarter was lower than expected. Three brokerage firms lowered their ratings on the online auctioneer. Qualcomm likewise issued a disappointing profit forecast.

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The pressure from tech shares siphoned momentum from Citigroup's strong earnings, and investors also shrugged off reports of merger talks between the Federated and May department store chains.

The Dow Jones industrial average fell 68.50, or 0.65 percent, to 10,471.47. Broader stock indicators also lost ground. The Standard & Poor's 500-stock index was down 9.22, or 0.78 percent, at 1175.41, and the Nasdaq composite index dropped 27.71, or 1.34 percent, to 2045.88.

The proposed retail merger would combine Federated's Macy's and Bloomingdale's stores with May's Lord & Taylor, Filene's and Marshall Field's.

Federated slid $1.77, to $55.31, on the news, while May gained $2.88, or 9.18 percent, to $34.25.

EBay tumbled $19.72, or 19.14 percent, to $83.33 after missing Wall Street profit forecasts by a penny per share.

Qualcomm posted a 46 percent rise in first-quarter earnings but disappointed investors with a conservative 2005 outlook. Qualcomm skidded $3.29, or 8.01 percent, to $37.78.

Citigroup dropped 27 cents, to $47.77, after reporting record quarterly earnings that were in line with Wall Street expectations. The financial giant and Dow component also announced a 10 percent increase in its quarterly dividend.

Ford Motor swung to a profit in the latest quarter but its shares nonetheless lost 47 cents, to $13.46.


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