Stocks slipped today -- wiping out all they had gained the last three days -- as Coca-Cola Co. became the latest company to confirm that profits are weakening.
Coke stock fell after the world's biggest soft drink maker said it expects to earn profits of between 77 cents and 82 cents a share for the second half of the year, which will be well short of the 99 cents a share analysts had been predicting.
Cautious investment strategists have been warning for weeks that Wall Street is overestimating the strength of the economy's recovery and setting unrealistic earnings goals for the last half of the year.
That fear was confirmed by Coke's announcement and a similar warning from Xilinx Inc., one of the biggest makers of computer chips. Xilinx said orders for its programmable chips are slowing because the electronics manufacturers who use them ordered too many parts earlier in the year. Now sales of the end products are slowing, so manufacturers are cutting their orders from companies like Xilinx. Some analysts are downgrading the entire chip industry as a result of the Xilinx announcement.
Other economic data out today showed the economy is growing very slowly. Industrial production increased by just 0.1 percent in August the Federal Reserve reported.
Government reports also showed U.S. petroleum supplies are shrinking -- and are expected to shrink more as the result of Hurricane Ivan, which has forced the evacuation of production platforms in the Gulf of Mexico and support facilities along the Gulf Coast.
But after rising early in the day, crude oil futures fell on the New York Mercantile Exchange after action by the Organization of Petroleum Exporting Countries to boost production in an effort to hold down prices.
While OPEC voted to increase production quotas for its members -- which produce about one-third of the world's oil -- oil experts said most OPEC members are already pumping more oil than the quotas call for, so the decision may not have much effect on supply.
Crude fell 81 cents a barrel to 43.58.
The Dow Jones industrial average closed at 10231.36, down 87 points. The Standard & Poors 500 stock index lost 8 points to 1120.37. The Nasdaq Stock Market composite index fell 19 to 1896.52.