Dow Climbs 42.47 to 10,768.27
ANNOUNCER: MONEYLINE continues. Here again, Willow Bay.</s>BAY: In tonight's headlines, the nation holds its breath, waiting for the Supreme Court to rule on the Florida recount. And a special look at a sector at a crossroads, wireless. As the government auctions off new space on the airwaves, a legal battle looms over the safety of phones. Plus: how baseball is played at the Major League level. We'll check out the agent who won a quarter billion dollar deal for a superstar shortstop. But first, more on tonight's top story: A series of profit warnings pile up Wall Street. It was a day that investors had to deal with earnings warnings from Dow components General Motors, Eastman Kodak and Honeywell, which is of course being acquired by GE. And after today's closing bell, Compaq Computer raised the red flag over both profits and end sales. The company warned that earnings would come out at 28 to 30 cents a share, well off the 36 cents forecasted by Wall Street. And the company projected revenue to be more than $11 billion, again below market expectations. But the warning was not a surprise, considering fellow PC makers Gateway, Apple and Dell have all projected weakness in recent weeks. In after-hours activity, Compaq fell 77 cents. In the regular session, the Dow showed relative strength considering the wave of profit warnings. It gained 42 to close at 10,768. A different story for the Nasdaq, where tech stocks lost ground after two-straight rallies. The index slid 83 points, or nearly 3 percent, to 2,931. Volume was almost 1.9 billion shares. In the broader market, the S&P; 500 lost nine points. Greg Clarkin followed the action on Wall Street all day and he has this report.</s>GREG CLARKIN, CNN CORRESPONDENT (voice-over): Like much of the rest of the country, Wall Street watched and waited for yet another day, wondering if election 2000 was ever going to end. It was a subdued trading floor at Merrill Lynch in New York as traders stayed on Supreme Court watch while buying and selling. The trading session ended with a split decision. The Dow rallied 42 points, the Nasdaq lost 83.</s>BRUCE STEINBERG, MERRILL LYNCH: The market has been kind of mixed today. The tech has been down, the Dow has been up. What that tells me is that people are focused probably on other things. I think once the election is resolved, we probably get some sort of relief rally, but you know, people think it's going to be over sooner rather than later. So I don't think that they're really sitting on the edge of their seats right now.</s>CLARKIN: Outside of watching Washington, traders contended with warnings. GM warned of lower profits and announced it's phasing out Oldsmobile with layoffs. Its stock rose as did shares of Eastman Kodak after it said the slowing economy had slowed sales. And Honeywell's Monday night warning of lower profits dragged its shares and those of its acquirer, General Electric, lower. Triquint Semiconductor warned and its stock plunged. Sun Microsystems was little-changed, a victory considering the recent selling it's seen. Nasdaq losers included JDS Uniphase and Ariba. Whether it was GM or Kodak, watching a stock rise on a profit warning was encouraging to some market watchers. They say it signals slower growth is already factored into some stocks.</s>JON BURNHAM, BURNHAM SECURITIES: The market tends to discount things way in advance, and the market is telling us now that you're going to have a slowdown certainly in growth, which we're already seeing, and possibly something more than that. So some of this is already in the market.</s>CLARKIN: And of course, Compaq's warning after the close of trading. Now, this was hardly a surprise given other PC makers have warned as well. But the question now is just how much bad news have investors factored into the PC sector and how much more are they willing to tolerate -- Willow.</s>BAY: Greg, it will be interesting to see what happens there tomorrow. Thanks, Greg. Investors should be excused if they feel a bit shell-shocked by the barrage of warnings. Terry Keenan takes a look "Behind the Numbers" at what has sparked these earnings concerns -- Terry.</s>TERRY KEENAN, CNN CORRESPONDENT: OK, and we'll try to answer some of Greg's questions. If it seems like these earnings warnings have been hitting the market in shotgun fashion, they have. In fact, the fourth quarter of 2000 is shaping up to be busiest confession season on record. And we haven't even entered the busiest period. That's the final two weeks of the quarter. Now, according to the folks at IBES, there have already been 372 pre-announcements. That's 59 percent more than for all of the fourth quarter of last year. Just as significantly, the companies that are missing are missing by a mile. Just look at today's warnings. Kodak saying fourth quarter will come in 32 to 34 cents shy. GM missing by 50 to 60 cents. And Honeywell saying it will miss by more than 10 cents. Remember the days when stocks were punished for missing by a penny? They're long gone. Today's warnings centered mostly on old economy names. But the bottom-line pinch is being felt across almost all sectors. That's because the income statement is being attacked from many angles this quarter. First of all, there was the sudden and rather severe slowing in the U.S. economy that just started in the last couple of months, a slowing that only adds to the currency inspired slowdown in European demand due to the still-weak euro. Now on top of that, many companies have taken hits in their investment portfolios this quarter. The sharp decline in Compaq's stake in CMGI was one of the factors it cited in its warning this evening But there is a bright spot in all of this mess. The folks at IBES have found that repeat offenders -- that is, companies that have taken down their numbers repeatedly throughout the year -- may have little further to fall. Now, those companies include Gateway, Apple, Intel, and Motorola. According to IBES, they sell an average of 23 percent after their first warning, but have dropped only 1 percent on their warnings this quarter. So some small silver lining in what is shaping up to be a terrible quarter for many companies -- Willow.</s>BAY: Terry, we will take the bright spots wherever we can get them these days. Thanks, Terry. Just ahead, an in-depth look at the wireless industry: greater access to markets but prospects for a new round of lawsuits over alleged health problems. Plus, we'll hear from fund manager Guy Pope whether tech stocks are primed for a recovery.