"This is a really nervous market. We have our government saying we're pretty sure there's going to be another terror attack and we've got continuing Enron-type issues," said Mike Weiner, managing director of equities at Banc One Investment Advisors. "You've got to have a sense of trust to buy equities, and a lot of people don't have that right now."

The Dow Jones industrial average closed down 21.95, or 0.2 percent, to 9,687.84, according to preliminary calculations, extending a 215-point drop yesterday that sent the index to its lowest level since early February.

Broader stock indicators fared better. The Nasdaq composite index gained 15.56, or 1.0 percent, to 1,578.12, after closing yesterday at its lowest level since Oct. 2.

The Standard & Poor's 500 index was little changed, rising 0.01 to 1,040.69.

The uneven close was in keeping with the choppy nature of trading all day. At various points during the session, all three major indexes were higher, but ultimately couldn't keep their gains.

Knight Trading slid $1.28, or 21.6 percent, to $4.64 on news that the Securities and Exchange Commission and National Association of Securities Dealers are looking into whether the trading firm made illegal trades during the technology boom. The company denied wrongdoing.

General Motors fell $1.80 to $59.45 after raising its estimates for the rest of the year but reporting a 12 percent decline in total U.S. vehicle sales during May.

And Bristol Myers Squibb dropped $1.18 to $26.65 after 29 states filed a lawsuit charging the drug company improperly delayed generic competition for its Taxol cancer drug.

Selective bargain hunting lifted some stocks.

Tyco advanced 72 cents to $16.77, reversing some of the selloff that followed news yesterday that CEO Dennis Kozlowski had resigned because of a sales tax violations scandal. Today, prosecutors in Manhattan charged Kozlowski with avoiding more than $1 million in sales tax on paintings he bought.

Microsoft rose 56 cents to $49.98.

Other tech gainers included Cisco, up 75 cents to $16.08, Dell Computer, up 75 cents to $26.93, and Intel, up 88 cents to $27.50.

And energy company El Paso, which fell sharply yesterday on word a top executive had committed suicide, climbed $2.10 to $24.05.

Still, the overall mood of the market remained negative. Analysts say the combination of accounting scandals, questions about analysts' ethics, lackluster earnings and political crises overseas are taking a toll on Wall Street. After two years of losses, investors have become extremely cautious, unwilling to buy unless they're sure that their stock purchases will pay off sometime soon.

Even the market's recent selloff, which sent stocks to levels not seen in months, has failed to draw new money in.