Procter & Gamble news triggers down day for market

The Dow falls 144 points as investors again grab onto bad news. Broader indexes post smaller losses.

©Associated Press

© St. Petersburg Times, published June 9, 2000

NEW YORK -- The Dow Jones Industrial Average fell sharply Thursday after Procter & Gamble surprised Wall Street with an earnings warning and a management shake-up. The escalating blue chip sell-off spread to the rest of the market, leaving most stocks with a loss.

The Dow fell 144.14 to close at 10,668.72. Broader stock indicators were also lower; the Nasdaq Composite Index fell 13.70 to 3,825.56, and the Standard & Poor's 500 fell 9.69 to 1,461.67.

Procter & Gamble shares fell $6.13 to $56.75, a 9.7 percent loss; shares climbed back to $57.50 in after-hours trading. The broader consumer-goods sector sustained only modest losses as investors speculated that Procter & Gamble's woes weren't a sign of trouble for the industry.

The harsh punishment for P&G indicated the market remains fairly volatile, said Michael Strauss, managing director of Commonfund Asset Management. "When bad news comes out, the market still appears ready to grab onto it," he said.

AT&T fell $2.44 to $35.25, adding to the Dow's decline. The drop came a day after AT&T backed off from a plan to increase long-distance rates. Federal regulators had harshly criticized AT&T's plan, noting that the company recently promised to reduce monthly phone bills.

Analysts said a sense of burgeoning optimism has pervaded Wall Street this week, but investors are still showing signs of nervousness over interest rates. Volume remained relatively light, suggesting many investors lack conviction, Strauss said.

"The lack of volume is a sign that the market doesn't believe that this is for real," he said. "At this point, we know the economy is probably not growing at the explosive rate it's been at, but it may still be too heated for the Fed."

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