News of a drop in consumer confidence and a slowdown in new-home sales sent U.S. stock markets lower on Tuesday, with the Nasdaq Composite Index down 27.18 at 2,281.32 by midday.
Technology stocks were battered by a new round of layoff announcements. JDS Uniphase (Nasdaq: JDSU), down US$2.75 at $29.88 at midday, said it will lay off 3,000 workers, mostly manufacturing employees in San Jose, California and Nepean, Ontario.
JDS, which makes fiber-optic components, said that the reductions “reflect opportunities for realignment and improved efficiency as a result of the current business environment.”
Aspect Plans Cuts
In a similar vein, Aspect Communications (Nasdaq: ASPT), a San Jose, California-based customer relationship management firm, said it will eliminate 160 jobs, or 6 percent of its workforce, as part of a “continuing effort to optimize operations.”
The move will result in a charge of $4 million to $6 million to results for the first quarter ending in March, the company said. Aspect shares were down $1.75 at $11.25.
The E-Commerce Times Index was down 3.9 percent at midday. Travelocity (Nasdaq: TVLY) was the only one of the 10 e-tailers in the index to register a gain.
The day’s economic news provided little hope for a speedy recovery. Reports said that the Conference Board’s consumer confidence index fell in February to its lowest level since June 1996, mainly due to lower expectations for business and employment conditions.
The drop was the fifth consecutive monthly decline, and showed that Americans are increasingly wary about the economy in the months ahead.
Separately, a Commerce Department report found that sales of new homes fell 10.9 percent in January from a month earlier, reports said. In addition, orders for durable goods — big-ticket items designed to last for several years — reportedly fell 6 percent in January, a much bigger drop than expected.
Waiting on the Fed?
Taken together, the reports hint that the U.S. economy is headed lower. The U.S. Federal Reserve could provide a boost in the form of an interest-rate cut, which would fuel spending and help corporate earnings.
The Federal Open Market Committee is next scheduled to meet March 20th, though some observers say a rate cut could come sooner than that.