Stocks ended a three-day rally and slid lower on Thursday, weighed down by disappointing earnings from Amazon.com Inc. and a report that showed low productivity gains from U.S. workers.
Amazon said higher costs offset holiday sales gains and that earnings would be short of Wall Street expectations, driving shares of the online retailer down 14.6 percent to $35.75. It released its earnings report after the market close Wednesday.
U.S. business productivity growth was sluggish at the end of 2004, according to a government report. Non-farm business productivity, or worker output per hour, grew at an annual rate of just 0.8 percent in the fourth quarter, the smallest advance since a drop in the first quarter of 2001, the Labor Department said Thursday.
The Dow Jones Industrial Average dropped 3.69 points, or 0.03 percent, to finish the day at 10,593.10. The Standard & Poor’s 500 Index dipped 3.30 points, or 0.3 percent, to end the day at 1,189.89. The Nasdaq Composite Index was down 17.42 points, or 0.8 percent, to 2,057.64.
Among local companies, shares of Salem Communications Corp. jumped 8.8 percent to close at $24.17 after the Camarillo-based family-themed radio broadcaster’s stock rating was raised to “buy” from “neutral” by Banc of America, citing its strong earnings growth rate. The 12-month price target was set at $28 per share.
Calabasas -based Digital Insight Corp. also enjoyed a lift as its shares gained 5.7 percent to $17.20 after the outsourced-software maker’s stock was raised to “buy” from “neutral” by D.A. Davidson & Co. The 12-month price target was set at $20 per share.
Shares of CB Richard Ellis Group Inc. rose 6.9 percent to close at $37.57 as investors reacted to its Wednesday after-hours earnings release. For the fourth quarter ended Dec. 31, the L.A.-based commercial real estate services firm reported net income of $66.4 million (88 cents per diluted share), compared with a net loss of $10.1 million (16 cents). Revenues increased 28.5 percent to $798.2 million.
And Napster Inc. bumped up 7.8 percent to $9.38 after the L.A.-based digital music firm took aim at rival Apple Computer Inc.’s popular iPod player by debuting its new portable subscription-based service, Napster To Go, that lets users legally download an unlimited number of songs to their MP3 players for a monthly fee.
On the downside, shares of Magnetek Inc. fell 5 percent to $5.70 after reporting lower second-quarter earnings. For the quarter ended Dec. 31, the L.A.-based digital power electronic products maker reported net income of $562,000 (2 cents per diluted share), versus a loss of $4 million (15 cents) in the year-earlier quarter. Revenues increased 10 percent to $64 million.
