Tech, economic woes
send stocks reeling

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By Lisa Singhania
Associated Press

NEW YORK >> Stock prices fell sharply yet again today, carrying the Dow Jones industrials down 165 points, as mediocre earnings from Cisco Systems and a dismal Federal Reserve report rankled investors already disheartened by the lethargic economy.

The market's drop was the latest evidence that stocks remain trapped in a narrow trading range created by negative investor sentiment. They say stock prices won't be able to advance until Wall Street gets some concrete signs that business is truly improving.

"People are waiting for some indication that things are getting better, and so far we haven't seen that," said Robert Streed, portfolio manager of Northern Select Equity Fund.

The Dow closed down 165.24 at 10,293.50, or 1.6 percent, its lowest close in 11 sessions. The suffering was even more pronounced in technology, sending the Nasdaq composite index down 61.43 to 1,996.36, a 3 percent loss and its weakest finish since July 10. The Standard & Poor's 500 index slipped 20.87, or 1.7 percent, to 1,183.53.

Decliners led advancers on the New York Stock Exchange, with 1,903 down, 1,165 up and 241 unchanged. Volume was 1.10 billion shares vs. 977.04 billion yesterday.

The NYSE composite index fell 8.08 to 604.42, the American Stock Exchange composite index dropped 12.93 to 870.09 and the Russell 2000 slipped 7.71 to 472.62.

The Treasury's 10-year note rose 27/32 to 99-20/32; its yield fell 12 basis points to 5.05 percent. The 30-year bond jumped 1-1/4 to 98-2/32; its yield fell 9 basis points to 5.51 percent.

The selling began early in the session in response to Cisco, which dropped $1.28, or 6.7 percent, to $17.98. The tech bellwether reported earnings late yesterday that were in line with expectations despite a 25 percent decrease in revenues. But Wall Street was unnerved by comments from Cisco's chief executive that the networking industry has not turned around despite some signs of improvements in the United States -- although Cisco said it remains confident about its business in the long term.

Those comments triggered declines in other technology stocks including Juniper Networks, which fell $2.43 to $23.47, and Ciena, which slipped $3.52 to $30.88.

The losses intensified this afternoon, when the Fed released reports from its 12 regional banks that depicted an economy in the grips of "slow growth or lateral movement" with sluggish retail sales and further declines in manufacturing.

The Fed survey, known as the beige book for the color of its cover, will be used when the central bank next meets Aug. 21 to determine interest rates. Although the central bank is expected to lower rates then -- in what would be the seventh such move of the year -- the reduction isn't expected to automatically revive the markets.

That's because the cuts have so far failed to stimulate economic growth and, therefore, boost corporate profits.

"There's no direction in the market," said Matt Brown, head of equity management at Wilmington Trust. "It's still too soon to say the market's ready to move significantly higher."