Nasdaq leads market's drop on Baidu.com note


Stocks sank on Thursday, led by a drop of more than 1 percent in the Nasdaq, as a downbeat brokerage comment on Chinese Internet company Baidu.com Inc. unnerved investors after record highs earlier in the day.

Earlier, a higher profit outlook from Wal-Mart Stores Inc had helped the Dow and S&P reach all-time highs.

Baidu.com, China's top Web search firm, lost 10 percent to $308.78 on Nasdaq after JPMorgan Chase & Co. predicted Baidu's third-quarter revenue will be slightly lower than estimated.

The research note undermined confidence that had driven the Nasdaq higher for four days to its best level in 6 1/2 years on the view that there will be strength in technology earnings despite the late summer credit squeeze.

Investors sold the best performers in the previous month's tech rally, pushing iPod maker Apple Inc down 2.7 percent to $162.23 and driving Blackberry producer Research In Motion Ltd. down 5 percent to $111.

U.S. Web search company Google Inc dipped 0.5 percent to $622 after hitting $641.41, another in a series of record highs earlier in the day on upgrades by several brokerages.

The Dow Jones industrial average was down 63.57 points, or 0.45 percent, to end at 14,015.12. The Standard & Poor's 500 Index was down 8.06 points, or 0.52 percent, to finish at 1,554.41. The Nasdaq Composite Index was down 39.41 points, or 1.40 percent, to close at 2,772.20.


Reuters
10/11/2007 8:48:01 PM