Stock markets tumble to lowest levels this year

By LISA SINGHANIA

Associated Press

NEW YORK — The Dow Jones industrial average plunged about 380 points Thursday while the Nasdaq composite index recorded its lowest close this year, as jittery investors reacted to the escalating violence in the Middle East.

Stocks already in a steady fall nosedived, pushing the Dow to its fifth-largest largest point loss ever, buffeted by rising oil prices on top of persistent fears about corporate profits, including an earnings warning from stalwart Home Depot.

The Dow closed down 382.07 at 10,031.72, a 3.7 percent decline, according to preliminary results.

Broader markets were also lower. The Nasdaq composite was down 94.43 to 3,074.06 — its lowest close of 2000. The Standard &amp Poor’s 500 index was off 34.90 to 1,329.69.

"In an already nervous market, this is all we didn’t need," said Al Goldman, an analyst with A.G. Edwards &amp Sons Inc. in St. Louis. "A terrorist attack, increased hostilities in the Middle East and a spike in oil prices — shake it all up and you get blind dumping of stocks."

The apparent terrorist attack on a U.S. military ship in Yemen early in the day sent oil prices up as much as 10 percent, helping to re-ignite inflation fears. And Israeli combat helicopters rocketed Palestinian leader Yasser Arafat’s residential compound in the Gaza Strip as well as a West Bank town in retaliation for the brutal killing of two Israeli soldiers by a Palestinian mob.

Oil prices were as high as $37.00 a barrel at one point on the New York Mercantile Exchange, approaching its recent 10-year high of $37.80 a barrel hit last month. In afternoon trading, crude futures were at $36.10.

Meanwhile, shares of Home Depot, the nation’s largest home improvement retailer, plunged $13.94, or 28 percent, to $35 after it warned of lower-than-expected earnings because of material costs and other factors.

The news sent other retailers down as well, including Wal-Mart, while financial stocks suffered as well.

Fears that higher oil costs would hurt airlines sent Continental Airlines down $2.81 at $41.13. Airplane manufacturer Boeing fell $4.06 to $56.13.

Technology stocks were mixed. Advanced Micro Devices rose 31 cents to $22.13 after reporting earnings ahead of Wall Street expectations. But Yahoo tumbled again on worries about future earnings, falling $8.75 to $56.63.

Declining issues outnumbered advancers by more than 3 to 1 on the New York Stock Exchange, where volume came to 1.11 billion shares, virtually unchanged from the previous session.

The Russell 2000 index was down 11.95 at 462.79.

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

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