Stocks fall sharply, led by tech stocks


Associated Press

NEW YORK – Stocks fell sharply today, led by a slumping technology sector, after an earnings warning by Apple Computer revived anxiety about corporate earnings.

The decline marked an end to a volatile month. Stocks tried but failed to stay in positive territory as a series of companies, including Apple and Intel, warned that their profit reports would fall short of expectations.

The Dow Jones industrial average closed down 173.14 at 10,650.92, down 196.45 compared to a week ago. Today’s drop nearly wiped out the Dow’s nearly 196-point gain of the day before.

Broader indicators also fell after rebounding Thursday.

The Nasdaq composite index fell 105.50 to 3,672.82, off 130.49 for the week. The Standard and Poor’s 500 index dropped 21.78 to 1,436.51, down 12.21 for the week.

“It’s just a continuation of what we’ve seen since Labor Day,” said John Shaughnessy, chief investment strategist at Advest. “This is a combination of the concerns about third-quarter earnings reports, the implications of rising oil prices for the economy and corporate profit and the implications of the weak euro.”

Those issues have kept the market down for most of September. Investors have been unloading stocks of companies that warn of disappointing earnings.

The market got a brief respite from the anxiety Thursday, but Apple’s warning, issued after the market closed, undid some of those gains. Apple ended the day down $27.75 at $25.75, a nearly 52 percent loss.

Other technology stocks also fell. Gateway fell $9.29 to $46.75. Hewlett Packard was off $9.25 at $96.88. Lucent slipped $1.25 to $30.50. And chipmaker Intel fell $2.88 to $41.56, furthering a decline that began last week when it warned of weak earnings.

“We’re not in a free-falling, down, bear market because the fundamentals for the U.S. economy remain superb,” said Charles Pradilla, chief investment strategist at S.G. Cowen Securities. “But this is a very expensive market. We’ve had Intel and Apple warn and, if you owned those stocks, you got decimated.”

An earnings warning from United Airlines sent it down $2 to $42. But many other old-economy companies appeared less affected by the turbulence created by the Apple announcement.

Procter &Gamble was unchanged at $67, retaining gains made Thursday on optimism about its corporate profits. Retailer Kmart was unchanged at $5.88.

Brokerage firm Bear Stearns rose $8.29 to $65 on rumors it might the latest financial services company to be acquired. The company declined to comment.

Chemical maker DuPont, dumped by many investors earlier this month after issuing its own profit warning, closed up $1.69 at $41.44.

Many energy issues also rose. Halliburton advanced 29 cents to $48.94. Schlumberger was up 89 cents at $82.31.

Also today, the Commerce Department released a report showing Americans’ incomes grew by 0.4 percent last month in addition to a 0.3 percent gain in July. But spending rose faster, by a brisk 0.6 percent in both July and August.

Advancing issues were about even with decliners on the New York Stock Exchange, where volume came to 1.13 billion shares, compared with the 1.19 billion in the previous session.

The Russell 2000 index was off 2.44 at 521.37, up 2.55 from a week ago.

Overseas, Japan’s Nikkei stock average was up 0.77 percent. Germany’s DAX index fell 0.51 percent, Britain’s FT-SE 100 was up 0.48 percent, and France’s CAC-40 dropped 0.70 percent.

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

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