Inflation worries stalk market; Black Hawk up on buyout offer

C/Net Investor

The market slowed this session, which ended Feb. 28, on news that the inflation monster continues to rear its head despite the cooling economy.

The drop was not helped by a late-session rally fueled by hopes of a sooner-than-expected interest rate cut. Earnings warnings battled it out with rate cut enthusiasm, but the session ended in a marketwide southward trend.

Investors are betting on an early rate cut before the Federal Reserve’s next meeting in late March. “We need the Fed and fast. I don’t think we can wait until the March meeting,´ said Matt Brown, in charge of equity management at Wilmington Trust. “You’re not going to get any relief from corporate earnings. The only possible hero here is the Fed.”

The Dow Jones Industrial Average slid 300.13 points, or 2.78 percent, ended at 10495.28. In tandem, the Boulder County Business Stock Index shed 346.38 points, or 9.97 percent, and closed at 3129.48. Declining issues outmaneuvered advancing issues 53 to 17.

Black Hawk Gaming gained 2.63 points this session, an increase of 37.5 percent. Black Hawk Chairman and Chief Executive Officer Jeffrey Jacobs offered to buy the shares he doesn’t already own for $11 per share. Jacobs currently owns about one-third of the casino operator’s stock. Black Hawk closed at $9.63, and was our top dollar gainer.

Shares of Qualcomm were hammered this session after Chief Executive Irwin Jacobs commented on possible delays in rolling out its third-generation wireless networks in Europe. The company recovered slightly on news that it has new customers for one of its communications chips. Qualcomm also said it is comfortable with analysts’ fiscal second-quarter earnings expectations, and that it anticipates revenue and income growth in the following quarter. Qualcomm fell 28.56 points, or 34.26 percent, and closed at $54.81. Qualcomm was our top dollar loser.

Veritas Software lost 11.44 points to end at $64.94. Morgan Stanley Dean Witter analyst Charles Phillips cut his rating on Veritas to “neutral” from “outperform.” Veritas closed down 14.97 percent.

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