Slumping Dow nearly falls below 10,000

Associated Press

NEW YORK – Investors worried about an impending earnings report today from Intel drove down stocks to their lowest levels in months. For the second time in four sessions, the Dow Jones industrial average came close to falling below 10,000, but a late rally mitigated the damage.

Concerns that Intel’s results, which were due out after the market’s close, would be disappointing sparked a selloff of other chip makers. Investors then moved on to Internet stocks; America Online, and Yahoo! all fell to 52-week lows on concerns that their growth was slowing and earnings would fall short.

The Dow closed down 149.01 at 10,089.71, according to preliminary calcuations, after dropping more than 200 points earlier in the session.

The Nasdaq composite index was down 76.49 at 3,213.79. The Standard and Poor’s 500 index fell 24.65 to 1,349.97.

After the market closed, IBM reported earnings in line with expectations. The stock ended regular trading up $1.88 at $113.

“The mood of the market clearly is the one of despair at this point,” said Kevin Caron, an associate strategist at Gruntal &Co., who believes earnings overall will be healthy.

Investors weren’t as optimistic.

Intel was up 56 cents at $36.25 after spending much of the day down and falling more than 11 percent Monday.

But Micron Technology fell $5 to $28.69 after Paine Webber cut its rating to “attractive” from “buy,” citing weak market conditions.

Some of the worst hemorrhaging came in Internet stocks. Investors worried about slowing growth drove AOL, Yahoo! and Amazon to their lowest levels in a year. Yahoo! fell $6.36 to $48.89; Amazon was off $2.44 at $21.88; and AOL slipped $9.31 to $43.30.

Blue chips also fell, pushed lower by a mix of profit taking and worries about corporate earnings.

Bank One slipped $1.81 to $32.81, after it reported its fourth straight quarterly decline. Citigroup fell $1.44 to $49.38, despite announcing earnings ahead of Wall Street expectations.

Oil-related stocks were higher, lifted by the continuing fighting in the Middle East and uncertainty about how that would affect U.S. supplies. Crude futures traded at about $33 on the New York Mercantile Exchange.

Schlumberger rose $2. to $81.88. Halliburton was up 19 cents at $43.38.

Pharmaceutical stocks, which traditionally are viewed as a safe bet in uncertain markets, also were higher. Pfizer rose $1.25 to $44.94 and Merck was up $1.31 at $78.19.

The market has dropped since early September on worries about the strength of third-quarter earnings. Many investors have been selling stocks they fear will report disappointing results. Tech stocks, which have been among the highest-profile and highest-priced in recent years, have been a particular focus of investors’ ire.

Declining issues outnumbered advancers by a more than 3 to 1 ratio on the New York Stock Exchange, where volume came to 1.16 billion shares, ahead of the 998.73 million reported Monday.

The Russell 2000 index fell 12.03 to 469.72.

Overseas, Japan’s Nikkei stock average rose 1.87 percent. Germany’s DAX index was off 0.51 percent, Britain’s FT-SE 100 up 1.23 percent, and France’s CAC-40 up 0.39 percent.

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

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