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The Honolulu Advertiser

Posted at 11:42 a.m., Wednesday, April 3, 2002

Economic worries send Dow falling

Hawai'i Stocks
Updated Market Chart

By Amy Baldwin
Associated Press

NEW YORK — Worries that rising tensions in the Middle East could quash the economic recovery drove stock prices sharply lower today, with the Dow industrials dropping more than 0 points in their fourth straight losing session.p> Analysts said investors have no reason to commit to stocks, including those priced lower after two weeks of consistent sellin

"The worry is that the turmoil in the Middle East will lead to a rise in oil prices and derail the economic recovery," both in the United States and globally, said Hugh Johnson, chief investment officer at First Albany Corp. "It is very troubling. It is very nerve racking. ... You can't help but be worried."

The Dow closed down 115.42, or 1.1 percent, to 10,198.29, according to preliminary calculations. The blue chip index has lost 228.62, or 2.2 percent, in the past four sessions. The Dow also posted its lowest close in five weeks, having last finished lower on Feb. 28, when it stood at 10,106.13.

The broader market also stumbled. The Nasdaq composite index declined 20.05, or 1.1 percent, to 1,784.35 after falling 58.22 Tuesday to its lowest close in a month. The Standard & Poor's 500 index fell 11.36, or 1.0 percent, to 1,125.40.

Analysts also attributed the selloff to profit-taking following strides the market made in February and the first half of March amid a series of encouraging economic reports. The Dow is now down 4.1 percent from its high for the year, 10,635.25 on March 19.

"Portfolio managers who had been looking for a reason to sell certainly got it," Johnson said.

Technology and telecommunications stocks were among the weakest today. Many analysts expect the sectors to be the last to recover from the recession because of a continued lag in demand.

IBM fell $1.05 to $99.96 the day after Goldman Sachs cut its first-quarter revenue estimate on the Dow industrial.

Chip maker Micron Technology declined $1.62 to $30.78 following a ratings downgrade by Morgan Stanley.

WorldCom fell 27 cents to $6.51 on news that the company will cut 3,700 jobs in the United States, or about 4 percent of its global work force. Additionally, Lehman Brothers downgraded the telecom stock.

Downgrades by brokerages hurt stocks of other companies as well. Dow industrial Caterpillar stumbled $1.48 to $54.92 after J.P. Morgan Chase lowered its rating.

Selling spread across most of Wall Street, however, and even positive news from some companies failed to trigger buying. DuPont, also a Dow stock, fell 68 cents to $46.67 despite its forecast that first-quarter earnings will exceed analysts' expectations.

Analysts said first-quarter results due out this month are unlikely to give the market much of a boost.

"Individual issues may be energized by earnings surprises and an increase in earnings forecast, but those appear to be few and far between," said Alan Ackerman, executive vice president at Fahnestock & Co.

Declining issues outnumbered advancers about 2 to 1 on the New York Stock Exchange. Volume came to nearly 1.2 billion shares, compared with yesterday's 1.16 billion.

The Russell 2000 index, which tracks the performance of smaller company stocks, fell 3.89, or 0.8 percent, to 496.60.