The Dow falls nearly 300 points, inching closer to bear territory, as investors project poor results.
Compiled from Times wires
© St. Petersburg Times, published April 4, 2001
NEW YORK -- Wall Street fell back into a deep slump Tuesday as a relentless stream of earnings warnings sent the Dow Jones industrials tumbling nearly 300 points and the Nasdaq Composite Index down more than 100.
Technology stocks plunged, pulling the broader market sharply lower. Both the technology-heavy Nasdaq and the broader Standard & Poor's 500-stock index drove deeper into a bear market, hitting their lowest levels since late October 1998.
Adding to Wall Street's nervousness was the unresolved dispute between the United States and China over an American spy plane, which was being held with its crewmen by the Chinese.
"In a bear market, any type of uncertainty is viewed negatively," said Jon Brorson, director of equities for Northern Trust, the money management unit of the Northern Trust Co.
Weighed down by the financial warnings from several technology companies, the Nasdaq composite fell 109.97 points, or 6.2 percent, to close at 1,673.00. The Nasdaq is now down 67 percent from its all-time closing high, reached March 10, 2000.
The losses in the S&P 500 index were not quite of that magnitude, but they were still severe. The index fell 39.41 points, or 3.4 percent, to 1,106.46. The S&P 500 is now down more than 27 percent from its closing high, reached March 24, 2000.
Technology selling also weighed on the Dow Jones Industrial Average, which fell 292.22 points, or 3 percent, to 9,485.71, after trading down more than 350 points during the session. IBM fell $4.25 to $90.41, while Microsoft lost $2.44 to $53.38. The Dow is now down 19 percent from its closing high of 11,722.98 reached in January 2000.
Investors and market strategists were disappointed that the stock market was unable to bounce back from the first quarter's severe losses.
"We couldn't even get a new month, a new quarter going here," Brorson said. "Investors typically don't think it's going to straight-line down." Money managers were most disappointed, however, by the collection of profit warnings issued after the market's close Monday. Several technology companies, notably those with once-heralded plans to make transactions easier between businesses on the Internet, said financial results will be jarringly weaker than Wall Street's expectations.
Ariba, a provider of software platforms for online transactions, said its sales would be far below analysts' estimates and that it would report a loss and lay off 700 workers. Ariba plunged $2.06, or 31.7 percent, to $4.44.
The losses were not confined to technology, though, as market strategists said investors seemed to be heeding all bad news in the bear market. Among the Dow stocks, J.P. Morgan Chase dropped $3 to $41.60, while United Technologies lost $2.57 to $70.83. Of the Dow's 30 component stocks, all fell Tuesday with the sole exception of Home Depot, which gained only 5 cents to $42.60.
"I can't pin this on any one specific event," said Charles G. Crane, strategist for Spears, Benzak, Salomon & Farrell, a division of Key Asset Management. "Certainly, there's concern about what's going on in China. But this mostly is the ongoing reports and worries about what the first quarter is going to look like and how it will set the tone for the rest of the year."
- Information from the New York Times and Associated Press was used in this report.