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Dow Ends Down 240, Nasdaq Falls 75 |
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December 17, 2000
NEW YORK (AP) — Spooked by an earnings warning from Microsoft, investors Friday dumped high-tech stocks in a selloff that quickly spread across the market. A bearish forecast from household products company Clorox added to Wall Street's fears that the economy is slowing too much, and that earnings might fall more than expected. ``It's not just tech companies warning any more, now you're into consumer products. It was banking earlier this month, this week UPS said business wasn't that good and now you have Clorox,'' said Larry Wachtel, market analyst at Prudential Securities. ``It's an overall economic malaise and each time one of these announcements comes out, it undermines the market.'' The Dow Jones industrial average closed down 240.03 at 10,434.96, a 2.3 percent loss. For the week, the Dow was off 277.95 or 2.6 percent. Search by ticker symbol, abbreviation from your local newspaper or company name The Nasdaq composite index dropped nearly 2.8 percent, falling 75.24 to 2,653.27 on Friday — bringing its weekly decline to nearly 9.1 percent or 264.11. The Standard & Poor's 500 index slid 28.78 to 1,312.15, almost a 2.2 percent decline, giving it a drop of 57.74 or 4.2 percent for the week. It was the heaviest trading day ever on the New York Stock Exchange. The expiration of option contracts and futures contracts Friday, in what is called a ``triple-witching,'' intensified the selling, but analysts said earnings concerns were responsible for most of Friday's losses. Microsoft's warning late Thursday that a worldwide slowdown in computer sales would hurt its second-quarter results was the latest in a series of announcements by major companies suggesting the slowing economy is hurting their results. Investors have been selling stocks, particularly technology issues, on those concerns since Labor Day. But recent warnings from non-technology companies, which were thought to be less vulnerable to a slowdown, are taking a toll on already anxious investors. Microsoft fell $6.31, or 11 percent, to $49.19. Other technology stocks also slid, including Intel, off $2.69 at $32.44 and Cisco Systems, off $2.77 at $48.17. Clorox's forecast of lower-than-anticipated quarterly results sent it down $3.94 to $30.06. Tobacco was also weak; Philip Morris was off $1.44 at $40.06. But financial and pharmaceutical issues, usually perceived as a safe haven in uncertain economic times, recovered somewhat after spending much of the session in negative territory. Banker J.P. Morgan rose $2.06 to $160. Schering Plough was up 6 cents at $57.94. A Labor Department report showing a higher-than-expected inflation reading also surprised Wall Street, which is counting on an interest rate cut early next year. The Federal Reserve, which sets the nation's monetary policy, previously has cited inflationary pressures as reasons to raise interest rates. Even influential Goldman Sachs strategist Abby Joseph Cohen's statement Friday that she did not expect the U.S. economy to fall into a recession failed to assuage the market. Declining issues led advancers by more than 7 to 5 on the NYSE. The exchange had a record 1.55 billion shares traded directly through its selling floor. The NYSE's consolidated volume, which includes shares traded on other exchanges, was nearly 1.79 billion shares, compared with nearly 1.3 billion on Thursday. The Russell 2000 index dropped 3.79 to 458.03. Overseas, Japan's Nikkei stock average fell 2.5 percent. Germany's DAX index slipped 2.1 percent, Britain's FT-SE 100 slid 1.3 percent, and France's CAC-40 was off 1.1 percent. On the Net: New York Stock Exchange: http://www.nyse.com Nasdaq Stock Market: http://www.nasdaq.com |