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NEW YORK (AP) - A revenue warning from Advanced Micro Devices gave investors another reason to question the economic recovery Wednesday, and prompted them to unload stocks once again.
The latest pullback followed two straight days of steep declines, which saw the Nasdaq composite and Standard & Poor's 500 indexes close below the lows that followed the Sept. 11 terrorist attacks. The Nasdaq also recorded a new five-year closing low on Tuesday.
At midday, the Dow Jones industrial average was down 48.79, or 0.5 percent, at 8,958.96, after falling 102.04 on Tuesday, its second straight triple-digit decline.
The broader market also sank. The Nasdaq fell 7.17, or 0.5 percent, to 1,350.75, having lost 45.95 Tuesday and closing below its post-Sept. 11 low of 1,423.19 on Monday. The Nasdaq has not finished as low as it did Tuesday since May 19, 1997.
The S&P 500 declined 6.00, or 0.6 percent, to 942.09, after falling 20.56 Tuesday and closing below its post-Sept. 11 low of 965.80.
Investors have been selling stocks for six weeks on a string of accounting scandals that have made them question whether to believe the earnings that companies report.
"The earnings worries are a function of the accounting worries," said Stephen Carl, head of equity trading at The Williams Capital Group.
A series of debacles at companies such as WorldCom, Tyco, ImClone Systems, Global Crossing, and Adelphia Communications have reduced investors' already waning confidence in the market.
"I think it is going to be a slow process for investors to get back to giving solid buy orders," Carl said. "You are going to see traders and bottom fishers come in for attractive prices. But that will be a short-term pop and things will return where they are now."
Thursday's Independence Day holiday, for which the market will be closed, also contributed to the selling. Investors were wary of holding onto stocks ahead of the long weekend. On Friday, the market will be open for a half day of trading.
Chip maker AMD fell 81 cents to $7.99 after lowering its second-quarter sales estimate to $600 million from the previous expected range of $620 million to $700 million.
Other tech losers included Scientific-Atlanta, which fell 69 cents to $13.38 on news it was cutting 1,300 jobs in Mexico. Genesis Microchip tumbled 92 cents to $6.43 after Prudential downgraded it to "hold" from "buy."
Investors also sold off blue chips, putting the Dow industrials below the 9,000 level. The Dow has not closed below 9,000 since Oct. 2 when it was recovering from big drops following the Sept. 11 terrorist attacks. Prior to the attacks, the Dow's last close below 9,000 occurred Dec. 21, 1998.
Procter & Gamble dropped $1.61 to $87.67, General Electric fell 70 cents to $27.40, and American Express stumbled 75 cents to $36.08.
Wednesday's economic news was mixed. Orders to U.S. factories rose 0.7 percent in May, according to the Commerce Department ( news - web sites). The increase was slightly better than analysts were expecting.
But the Institute of Supply Management reported that its non-manufacturing index fell to 57.2 in May, a bigger-than-expected decline.
Declining issues outnumbered advancers more than 5 to 2 on the New York Stock Exchange ( news - web sites). Volume came to 676.88 million shares, below the 776.43 million traded at the same point Tuesday.
The Russell 2000 index, which tracks smaller company stocks, fell 9.12, or 2.1 percent, to 423.72.
Overseas, Japan's Nikkei stock average finished Wednesday up 1.8 percent. But in late-day trading in Europe, stocks were lower. Germany's DAX index was down 1.5 percent, France's CAC-40 sank 3.0 percent, and Britain's FTSE 100 slid 3.4 percent.
NEW YORK (AP) - A revenue warning from Advanced Micro Devices gave investors another reason to question the economic recovery Wednesday, and prompted them to unload stocks once again.
The latest pullback followed two straight days of steep declines, which saw the Nasdaq composite and Standard & Poor's 500 indexes close below the lows that followed the Sept. 11 terrorist attacks. The Nasdaq also recorded a new five-year closing low on Tuesday.
At midday, the Dow Jones industrial average was down 48.79, or 0.5 percent, at 8,958.96, after falling 102.04 on Tuesday, its second straight triple-digit decline.
The broader market also sank. The Nasdaq fell 7.17, or 0.5 percent, to 1,350.75, having lost 45.95 Tuesday and closing below its post-Sept. 11 low of 1,423.19 on Monday. The Nasdaq has not finished as low as it did Tuesday since May 19, 1997.
The S&P 500 declined 6.00, or 0.6 percent, to 942.09, after falling 20.56 Tuesday and closing below its post-Sept. 11 low of 965.80.
Investors have been selling stocks for six weeks on a string of accounting scandals that have made them question whether to believe the earnings that companies report.
"The earnings worries are a function of the accounting worries," said Stephen Carl, head of equity trading at The Williams Capital Group.
A series of debacles at companies such as WorldCom, Tyco, ImClone Systems, Global Crossing, and Adelphia Communications have reduced investors' already waning confidence in the market.
"I think it is going to be a slow process for investors to get back to giving solid buy orders," Carl said. "You are going to see traders and bottom fishers come in for attractive prices. But that will be a short-term pop and things will return where they are now."
Thursday's Independence Day holiday, for which the market will be closed, also contributed to the selling. Investors were wary of holding onto stocks ahead of the long weekend. On Friday, the market will be open for a half day of trading.
Chip maker AMD fell 81 cents to $7.99 after lowering its second-quarter sales estimate to $600 million from the previous expected range of $620 million to $700 million.
Other tech losers included Scientific-Atlanta, which fell 69 cents to $13.38 on news it was cutting 1,300 jobs in Mexico. Genesis Microchip tumbled 92 cents to $6.43 after Prudential downgraded it to "hold" from "buy."
Investors also sold off blue chips, putting the Dow industrials below the 9,000 level. The Dow has not closed below 9,000 since Oct. 2 when it was recovering from big drops following the Sept. 11 terrorist attacks. Prior to the attacks, the Dow's last close below 9,000 occurred Dec. 21, 1998.
Procter & Gamble dropped $1.61 to $87.67, General Electric fell 70 cents to $27.40, and American Express stumbled 75 cents to $36.08.
Wednesday's economic news was mixed. Orders to U.S. factories rose 0.7 percent in May, according to the Commerce Department ( news - web sites). The increase was slightly better than analysts were expecting.
But the Institute of Supply Management reported that its non-manufacturing index fell to 57.2 in May, a bigger-than-expected decline.
Declining issues outnumbered advancers more than 5 to 2 on the New York Stock Exchange ( news - web sites). Volume came to 676.88 million shares, below the 776.43 million traded at the same point Tuesday.
The Russell 2000 index, which tracks smaller company stocks, fell 9.12, or 2.1 percent, to 423.72.
Overseas, Japan's Nikkei stock average finished Wednesday up 1.8 percent. But in late-day trading in Europe, stocks were lower. Germany's DAX index was down 1.5 percent, France's CAC-40 sank 3.0 percent, and Britain's FTSE 100 slid 3.4 percent.