Dow plunges
below 10,000

Its third straight triple-digit loss
puts it under the milestone for the
first time since April 9

---

By Lisa Singhania
Associated Press

NEW YORK >> The Dow Jones industrials closed below 10,000 for the first time in more than four months today after the latest installment of bad economic and corporate news -- a government report showing a consumer spending slowdown in July and a revenue warning from Sun Microsystems.

The plunge, which marked the fourth straight decline for the market, came a day after news that the second-quarter gross domestic product was at its weakest level in eight years. Analysts said investors, already disheartened by the market's previous selloffs, are refusing to buy when the prospects for a recovery are so bleak.

"We've broken through some important psychological levels on the Dow by going below 10,000, and tech stocks are getting whacked," said Bryan Piskorowski, market commentator at Prudential Securities.

"There's a lot of feeling of doom and gloom out there, and the rank-and-file investor is on the sidelines waiting it out."

The Dow closed down 171.32 at 9,919.58, a 1.7 percent loss, after falling as much as 221 points. The blue-chip index has fallen 503 points or 4.8 percent this week, and has dropped more than 100 points in each of the last three days. It last closed below 10,000 on April 9, when the index measured 9,845.15.

Broader stock indicators also slid, a reflection of widespread selling in technology stocks. The Nasdaq composite index dropped 51.49 to 1,791.68, its lowest close since 1,745.71 on April 9, while the Standard & Poor's 500 index lost 19.53 to 1,129.03. The Nasdaq has fallen 125 points,or 6.5 percent, since the week started; the S&P has lost nearly 56 points, or 4.7 percent, during the same time.

Decliners led advancers more than 2 to 1 on the New York Stock Exchange, with 2,034 down, 1,061 up and 218 unchanged. Volume was 1.17 billion shares vs. 962.81 million yesterday. The NYSE composite index fell 7.43 to 586.10, the American Stock Exchange composite index fell 7.86 to 870.98 and the Russell 2000 index was off 5.28 at 468.06.

The Treasury's 10-year note fell 1/4 to 101-18/32; its yield rose 3 basis points to 4.80 percent. The 30-year bond fell 7/32 to 99-31/32; its yield rose 2 basis points to 5.38 percent.

Once again, discouraging economic data was the catalyst for a market selloff. The Commerce Department said consumer spending rose just 0.1 percent during July, an unexpectedly weak showing given that Americans began receiving tax rebate checks last month. A day earlier, the government had reported that the gross domestic product rose at an annual rate of only 0.2 percent during the second quarter -- the weakest showing since the first quarter of 1993.

The market responded with widespread selling. Technology issues hit particularly hard.

Sun Microsystems fell $2.36 to $11.07, a more than 17 percent loss, after announcing late yesterday it probably will lose money this quarter because demand for its products in Europe and Japan has been softer than expected.

Advanced Micro Devices slipped 91 cents to $13.29 after it warned yesterday afternoon of disappointing revenues because of weak demand for some of its computer chips.

Corning, the biggest maker of glass products used in telecommunications networks, plunged $2.55 to $12.05 after announcing yesterday that a sudden cooling of demand for fiber products will force it to cut another 1,000 jobs from its optical fiber work force.

Chief Financial Officer James Flaws said the company has seen a slowing in orders across all fiber product lines, and now expects overall market growth for optical fiber in 2001 to be much less than the previous 15 percent outlook. Corning has now announced the elimination of 8,000 positions, or about 20 percent of its global work force.

"There's a complete absence of buyers in the market, so anyone who wants to sell is selling into a vacuum, and it's just not pretty," said Charles G. Crane, strategist at Victory SBSF Capital Management.

All three indexes are now well below where they started the year, although not at their 2001 lows. The Dow is down 8 percent and the Nasdaq off more than 27 percent, while the S&P has lost more than 14 percent.

Meanwhile, in a long-awaited move, the European Central Bank today eased interest rates for only the second time this year, pointing to lower inflation across the continent and admitting it misjudged the severity of the economic malaise spreading from the United States. The bank cut its main interest rate by a quarter point to 4.25 percent. With growth stalling in key economies such as Germany, the move was widely expected, though analysts cautioned against overestimating its effect. The U.S. Federal Reserve has cut rates seven times this year to try to avert a recession.