Stocks fall sharply; Dow tumbles nearly 300 points

By Lisa Singhania

Associated Press

NEW YORK – Stocks fell sharply again Wednesday, with the Dow dropping nearly 300 at one point, amid a cascade of job cuts and the prospect of weaker earnings because of the terrorist attacks.

The Dow Jones industrials were down 256.99 at 8,646.41 in afternoon trading.

The Nasdaq composite index was down 72.78 at 1,482.30, while the Standard &Poor’s 500 index was off 29.39 at 1,003.35. The S&P last closed below 1,000 on Oct. 13, 1998.

The selling, while not entirely unexpected, was a blow to hopes that the market was steadying itself after Monday’s huge selloff, in which the Dow fell a record 684 points and dropped below 9,000 for the first time in 2 1/2 years. Stocks held steady on Tuesday, with the Dow slipping only 17.

“I think the initial support and focus on patriotism by individual investors and the stock buybacks by companies earlier this week is now gravitating toward the uncertainty of the economy,” said Tom Galvin, chief investment strategist at Credit Suisse First Boston. “There’s no sense of urgency to sell or to buy at this point.”

Boeing’s announcement late Tuesday of as many as 30,000 job cuts, as well as predictions of troubles ahead by Eastman Kodak and others, worried investors.

“It’s hard to look at headlines of 30,000 layoffs and more and not worry about what the impact is going to be on an economy that is already slowing,” said Charles White, portfolio manager at Avatar Associates. “From a sentiment standpoint, we’re starting to get to levels of despair among investors.”

Eastman Kodak slid $4.18 to $35.65 after it lowered third-quarter expectations and said more job cuts are inevitable. The world’s largest photography company had announced in April it was cutting 3,500 jobs from a global payroll of 78,400.

Boeing fell 24 cents to $32.90 on word of as many as 30,000 job cuts due to an anticipated slowdown in air travel following the attacks.

Technology stocks also took a hit. Intel fell $2.06 to $21.41.

“I think market overall is bracing for higher unemployment,” said Robert Streed, portfolio manager of Northern Select Equity Fund.

Among the few winners Wednesday were telecommunications company Verizon, which rose $2.05 to $53.75.

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