Nasdaq tumbles below 3,000 mark


Associated Press

NEW YORK – Wall Street’s pessimism intensified today with investors sending stocks sharply lower amid growing concerns about earnings and the slowdown in the U.S. economy.

The high-tech focused Nasdaq composite index bore the brunt of a new string of analysts’ downgrades in the technology sector and tumbled 151.55 to finish at 2,875.64. This was the Nasdaq’s lowest close since Oct. 28, 1999, when it finished at 2,875.22.

Other market indexes also recorded sharp declines. The Dow Jones industrial average fell 167.22 to 10,462.65, and the broader Standard &Poor’s 500 index was off 25.10 at 1,342.62.

Already downtrodden investors saw little reason to buy given the still unresolved presidential election and a spate of analyst downgrades of tech companies. Doubting they’d ever see the market’s usual post-election rally, investors stuck to selling stocks whose earnings forecasts are bleak, particularly high-techs.

“Investors are just totally frustrated here,” said Larry Rice, chief investment officer at Josephthal &Co. “They’re frustrated by the inability of research departments at some of the biggest houses on the Street to adequately project what’s happening with stocks.”

Technology issues lost ground as investors digested more bad news and awaited an earnings report due from Agilent, the company spun off by Hewlett-Packard.

Agilent said after the close of regular trading that it earned 66 cents a share during the fourth quarter, beating analysts’ estimates by 15 cents. It gained $1.50 in after-hours trading, recouping some of the $2.81 it lost in the regular session, in which Agilent closed at $44.56.

Technology losses were widespread. Oracle fell $4.06, closing at $24.75, on news from Friday that executive vice president Gary Bloom is leaving to become CEO of Veritas Software. It was the second time in less than five months that the software maker has announced a key departure.

Internet auctioneer eBay stumbled $8.94, or nearly 21 percent, to close at $34.50 after Lehman Brothers downgraded its stock.

Morgan Stanley Dean Witter downgraded and cut its projected prices for network equipment makers, including Juniper Communications and Cisco Systems. Cisco dropped $1.50 to $51.25, and Juniper plunged $32.13, or 21 percent, to $121.88.

Investors traded cautiously during a Florida Supreme Court hearing on the presidential election recount. But they were more uneasy about profit prospects and an economic slowdown than the election’s outcome, analysts said.

“We have a very serious problem with earnings outlooks,” said Edward Yardeni, chief economist at Deutsche Morgan Grenfell. “There is a perception that U.S. economic growth is getting depressed by high oil prices and a very strong dollar, which makes our exports more expensive overseas.”

Gainers included Quaker Oats, which rose $5.19 to $95.50 on news reports that the food maker’s board is considering an acquisition by Coca-Cola. Two weeks ago, Quaker, whose most valuable brand is Gatorade, rejected a $14.8 billion offer from PepsiCo.

Drug stocks were mostly higher, possibly because they are considered wise buys during bearish markets or a slower economy. Merck rose $1.63 to $90.13.

But financial companies ended lower, most likely on concerns about loan volume and defaults in a slowing economy. Banker J.P. Morgan slipped $4.06 to $142.06.

The Russell 2000 index, which tracks smaller companies, fell 12.37 to 470.24.

Declining issues outnumbered advancers 2 to 1 on the New York Stock Exchange where consolidated volume was 1.14 billion million, below Friday’s 1.26 billion.

Overseas markets also were lower. Japan’s Nikkei stock average fell 0.09 percent. Germany’s DAX index was down 2.1 percent, Britain’s FT-SE 100 lost 1.5 percent, and France’s CAC-40 was off 2.3 percent.

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

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