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27

U.S. Stocks Fall on Economic Concern Boston Scientific Drops

U.S. stocks retreated for a second day on concern that a slowdown in the world's biggest

U.S. stocks retreated for a second day on concern that a slowdown in the world's biggest economy may accelerate, hurting earnings growth.

Boston Scientific Corp. led health-care stocks lower after the medical company's sales fell short of analysts' estimates. General Motors Corp. declined as the prospects for a link with Renault SA and Nissan Motor Co. faded. Those companies may start talks with Ford Motor Co., people familiar with matter said.

``The market is paying attention to the slowdown,'' said Nick Sargen, who helps manage $30 billion as chief investment officer at Fort Washington Investment Advisors in Cincinnati. ``The prospects for profits are starting to weigh'' on stocks.

The Standard & Poor's 500 Index lost 5.31, or 0.4 percent, to 1312.72 at 10:36 a.m. in New York. The Dow Jones Industrial Average decreased 37.22, or 0.3 percent, to 11,496.01. The Nasdaq Composite Index fell 17.73, or 0.8 percent, to 2220.02.

Stocks have fallen this week as concerns about the pace of growth overshadowed confidence that the Federal Reserve is unlikely to raise interest rates this year.

The Dow average, which sank the most in six weeks yesterday, has declined 0.5 percent since Sept. 15 as has the S&P 500 index. The Nasdaq has fallen 0.7 percent.

The market erased its gains this week after the Philadelphia Fed's general economic index shrank for the first time in three years and the Conference Board's gauge of leading indicators showed a slump may extend into next year.

Earnings Forecast

Earnings growth at S&P 500 index companies will slow through the rest of the year, climbing 13.8 percent this quarter and 12.9 percent in the final three months of 2006, according to a Sept. 15 Thomson Financial survey of analysts. Profits rose 16.3 percent in the second quarter.

Boston Scientific lost $1.68, or 10 percent, to $14.68 for the biggest decline in the S&P 500. The maker of drug-coated heart stents reported third-quarter sales of $1.97 billion to $2.04 billion, less than the $2.17 billion average estimate of analysts in a survey by Thomson.

UBS AG cut its rating on the shares to ``neutral'' from ``buy'' and reduced its price forecast by 44 percent to $18.

A measure of health-care companies slid 0.7 percent for the second-biggest decline among 10 industry groups in the S&P 500.

Medtronic Inc., the top maker of defibrillators, slid 90 cents to $46.33. St. Jude Medical Inc., which also makes defibrillators, lost 98 cents to $35.64. The stock was downgraded to ``underperform'' from ``market perform'' by analysts at Sanford C. Bernstein & Co.

Hewlett-Packard

Hewlett-Packard Co. fell 6 cents to $34.80. Chief Executive Officer Mark Hurd will speak today on how investigators spied on workers as part of a probe to ferret out the source of board leaks dating back to January 2005.

The company also received a request for information from the U.S. Securities and Exchange Commission and California Attorney General Bill Lockyer said Hewlett-Packard isn't cooperating with his probe.

GM tumbled 52 cents, or 1.7 percent, to $30.41 for the No. 2 decline in the Dow average. Carlos Ghosn's Renault and Nissan may start talks with Ford, two people with knowledge of the discussions said. Ford shares gained 7 cents to $7.83.

General Motors, Ford

Spokesmen for GM, Renault and Nissan yesterday said negotiations continue and no decisions have been made. Ford spokesman Oscar Suris declined to comment.

Automakers and car parts makers in the S&P 500 dropped 1.2 percent for the worst performance among the benchmark's two dozen industry groups.

Cablevision Systems Corp. slid 50 cents to $22.49. The fifth-largest U.S. cable-television provider awarded stock options to an executive after his death in 1999, then backdated them to give the illusion they were granted when he was alive, according to a regulatory filing. Charles Schueler, a spokesman for Cablevision, declined to comment beyond the filing.

New York Times Co. declined 80 cents to $22.03. The company forecast third-quarter profit, including some costs, of up to 10 cents a share, less than the 18-cent estimate of analysts. The publisher of the New York Times became the third media company this week after Dow Jones & Co. and Belo Corp. to cite weak advertising sales for lowering forecasts.

3Com Corp. slid 20 cents to $4.36. The maker of computer- networking equipment had first-quarter revenue of $300.1 million yesterday, less than the $314.9 million estimated in a Thomson survey.

Nike Rises

Nike Inc. rose $3.84, or 4.7 percent, to $86.30 for the biggest gain in the S&P 500. The largest athletic-shoe maker reported first-quarter sales of $4.19 billion, which exceeded the $4.16 billion average estimate from analysts.

Global orders of shoes and clothing for delivery between September and January, a gauge of future sales, rose 6 percent, higher than most analysts estimated. U.S. orders rose 8 percent. Goldman Sachs Group Inc. analyst Margaret Mager was expecting a range of 4 percent to 6 percent for global and U.S. orders.

Tribune Co. gained $1.55 to $33.65. The publisher of the Los Angeles Times and the Chicago Tribune agreed to consider a sale of the company or some assets, according to a person familiar with the discussions. Tribune spokesman Gary Weitman declined to comment.

Texas Instruments Inc. advanced 53 cents to $32. The largest maker of processors for mobile phones said its board authorized the repurchase of an additional $5 billion of its common stock and raised the dividend 33 percent.

Palm Inc. gained 59 cents to $15.09. The maker of the Treo e-mail phone said it will buy back $250 million in stock, or as much as 17 percent of the total shares outstanding.