Stocks Fall for 4th Straight Trading Day
Stocks fell for the fourth straight session Wednesday as Wall Street struggled with fears of rising bankruptcies and the accuracy of corporate bookkeeping.
“The monsters have been earnings disappointments, terrorists, now accounting,” said Scott Vergin, a fund manager for the Lutheran Brotherhood, a money management firm in Minneapolis. “In this environment, it’s easy to lose ground and hard to make it up so you try and prevent disasters” by being cautious.
The Standard & Poor’s 500 index lost 6.51 points, or 0.6%, to 1,083.51--its lowest close since Oct. 31. The technology-laden Nasdaq composite index dropped 25.81 points, or 1.4%, to 1,812.71. That’s its lowest close since Nov. 5.
The Dow Jones industrial average lost 32.04 points, or 0.3%, to 9,653.39, its lowest close since Jan. 29.
Almost two stocks fell for every one that rose on Nasdaq, while decliners trounced advancers by 19 to 11 on the New York Stock Exchange. Volume was heavy.
Even an upbeat profit outlook from networking giant Cisco Systems and Tyco International’s insistence it isn’t facing a cash crunch couldn’t buoy the market.
Cisco after the close reported that its quarterly profit fell by more than half but still topped expectations, signaling corporate spending on technology may be turning around. Its shares fell to $17.22 in after-hours trading after closing at $18.61, up 11 cents in regular trading.
Tyco, meanwhile, rebounded from big losses Monday and Tuesday to gain $2.82 to $25.92.
VeriSign was the latest company to be slammed by accounting fears. The computer security and Web address provider dropped $2.52 to $23.93 amid investor concerns about possible accounting issues related to minority investments, analysts said.
WorldCom and other telecom stocks continued their recent decline. WorldCom has lost more than half its value this year as the beleaguered telecommunications sector has faltered under high debt levels and on fears about its quarterly earnings, expected today. WorldCom, the most active issue on Nasdaq the last seven sessions, fell 28 cents to $6.69 on Wednesday.
Bankruptcies in the telecom industry and downbeat results or outlooks from rivals AT&T; and Sprint Group also have hurt WorldCom shares.
“Many stocks are caught up in a cloud of uncertainty that is impacting them day after day,” said Alan Ackerman of brokerage Fahnestock & Co.
AT&T; shares lost 67 cents to $15.60, while Sprint dropped $1.19 to $12.64. The Amex telecom index fell 2.7% to a 52-week low, and is down 21.6% year-to-date.
Investors looked past an upbeat economic report. The Labor Department said the productivity of U.S. workers grew at a brisker-than-expected pace in the final three months of last year. The number of hours workers spent on the job fell at the fastest pace in more than a decade.
In other market news:
* General Mills sank $5.16 to $43.55 after the company, whose products include Cheerios cereal and Progresso soup, warned earnings would be lower than expected because sales operations were disrupted as a result of its acquisition of Pillsbury.
* PepsiCo slumped $1.71 to $49.10. The soft-drink and snack-food giant reported a 16% rise in quarterly profit, but shares fell on worries archrival Coca-Cola is muscling in on the company’s popular Gatorade sports drink brand after PepsiCo said that line faced “intense competitive pressure.” Coke shares gained 75 cents to $46.50.
* Online payment provider PayPal delayed its initial public stock offering. The Palo Alto-based company hoped to sell 5.4 million shares for $12 to $14 a share Wednesday evening and launch trading on Nasdaq today, but a patent infringement lawsuit filed by CertCo Inc. prompted investment bankers to delay the offering for at least 24 hours. The IPO pricing is expected to occur tonight, enabling PayPal to make its debut Friday.
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Market Roundup: C6,C7
