Dow recoups early loss but closes under 10,000

Associated Press

NEW YORK —Stocks dropped sharply in volatile trading Wednesday, slicing more than 400 points off the Dow Jones industrials before bargain hunters moved in and helped the market recover most of its losses.

Investor despair over a generally bleak earnings outlook brought the Dow to its first close below 10,000 since March 14, although the blue chips managed to regain more than 300 points during the course of the day. The tech-focused Nasdaq composite index ended with a moderate loss, but it also rebounded smartly from its lows of the session.

A disappointing earnings report from IBM was the catalyst for Wall Street’s latest sharp decline.

"There are still doubts about earnings growth rates, and there are going to be doubts about the rally and reversal today," said Brian Belski, a market strategist at U.S. Bancorp Piper Jaffray.

Wall Street’s day began with traders already anxious following IBM’s report that its earnings met expectations but that its growth was slowing.

During regular trading, IBM lost $17.56, or nearly 16 percent, and closed at $95.

A Labor Department report early Wednesday showing a pickup in inflation compounded the sell-off, which spread throughout the market. But bargain hunting began in late morning, reviving many stocks.

Copyright ©2000 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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