Stock market plunge shows no sign of abating

Associated Press

NEW YORK — The stock market hasn't just been falling since last Labor Day. It has been plunging, so much so that last year's levels suddenly don't seem so bad.

When the Nasdaq composite index accelerated its decline shortly after Labor Day and lost 10 percent in September, no one imagined the market would still be tanking a year later. But it is, and the selloffs, which had been confined to technology, have spread to the overall market. As if that weren't enough, the selling frenzy shows no sign of fading.

"I see nothing that tells me we are at the end," said Gary Kaltbaum, market technician for Investors' Edge Partners.

The numbers themselves are grim.

• The Dow Jones industrial average is down about 1,200 points, or 12 percent, from where it stood this time last year.

• The Nasdaq composite index, whose tumbling tech stocks ended the bull market, has lost more than 2,400 points since then, plummeting 57 percent.

• The Standard & Poor's 500 index has lost about 26 percent.

Stocks fluctuated before closing modestly higher yesterday. The Dow gained 30.17 to 9,949.75, while the Nasdaq was up 13.75 at 1,805.43 and the S&P 500 rose 4.55 to 1,133.58.

But analysts say there's no reason to believe the market won't go even lower — not with persisting rounds of corporate layoffs, profit warnings and weak economic reports.

"If you are looking for something to worry about, there is plenty to worry about," said Hugh Johnson, chief investment officer at First Albany.

Investors' worries Thursday centered on a government report showing consumers, whose purchases account for two-thirds of the nation's economy, curbed their spending in July, as well as a revenue warning from Sun Microsystems.

A year ago, investors were just beginning to hear primarily technology companies warn of skimpier earnings, signaling the end of the go-go bull market. Since then, however, profit warnings have increased, moving across the market's sectors, and there appears to be no end in sight.

"All bets are still off. ... I have to wonder if there is a lot more to go," Kaltbaum said.

Hopes that business and the market will improve this year or even early next year have dim-

med this week on evidence that consumers are feeling shaky and spending less.

"There is no light at the end of the tunnel," Johnson said.

The Commerce Department's report Thursday said consumer spending rose just 0.1 percent during July, an unexpectedly weak showing after Americans began receiving tax rebate checks last month. The news came a day after a government report showed gross domestic product at its weakest in eight years, inching up just 0.2 percent.

And Tuesday, the Conference Board reported that consumer confidence dropped for the second straight month in August, upsetting investors who had felt reassured recently as consumers kept buying houses, cars and clothes, although at a slower pace.