Posted at 11:50 a.m., Monday, June 25, 2001

Big-name stocks suffer as Dow dips

Associated Press

NEW YORK — Blue chip stocks fell sharply today as investors' increasing caution prevailed over optimism about a likely interest rate cut this week.

The softness in big-name stocks, which limited technology gains, reflected market fragility and investors' shaken confidence in light of recent corporate warnings and layoff announcements.

The Dow Jones industrial average closed down 100.37 at 10,504.22, according to preliminary calculations, its second straight session of triple-digit losses.

Broader stock indicators were mixed, reflecting tech's overall stronger performance. The Nasdaq composite index rose a moderate 16.00 to 2,050.84, while the Standard & Poor's 500 index fell 6.74 to 1,218.61.

The weakness came despite widespread expectations that the Federal Reserve will cut interest rates for the sixth time this year when it meets tomorrow and Wednesday.

Although stocks rose initially, the trend reversed itself as the day went on, a sign that investors remain wary after weeks of hearing from companies reducing their earnings projections and cutting jobs.

"It's not a surprise that the Fed is probably going to cut rates, so there's not a lot for the market to react to. This was expected and had already been factored in," said Bryan Piskorowski, market commentator at Prudential Securities. "You also have a little bit of skittishness. We're still having earnings preannouncements and investors are unwilling to step up and buy."

Blue chips fell across the market. Some of the most notable declines came in stocks that usually benefit from rate cuts, including Home Depot, which dropped $1.71 to $49, and American Express, which fell 87 cents to $39.88.

Declining issues outnumbered advancers by 3 to 2 on the New York Stock Exchange. Volume came to 1.03 billion shares, compared with 1.18 billion at the same point Friday.

The Russell 2000 index fell 4.46 to 484.19.