Terrorist worries
hit stocks again

---

By Amy Baldwin
Associated Press

NEW YORK >> Caution crept back into Wall Street today as fears about terrorism resurfaced, but the nervousness wasn't enough to stop investors from trying to move the market higher.

The major stock indexes fluctuated before ending the session modestly lower, giving up early gains following a midday news conference by U.S. Attorney General John Ashcroft, who reported that three German-based terrorists are being sought for planning the Sept. 11 terrorist assaults on the World Trade Center and Pentagon. Soon after, Washington, D.C., officials confirmed that the deaths of two postal workers were caused by inhalation anthrax.

The news reawakened Wall Street's concerns about national security and how the market will fare as the United States retaliates for the attacks.

But the downturn wasn't surprising given the Dow Jones industrials' 172-point surge yesterday, which was triggered by largely lackluster earnings reports. While a number of companies today reported satisfactory results, analysts said that wasn't enough to sustain a rally given investors' fears about terrorism.

The Dow closed down 36.95 at 9,340.08. The broader market also finished lower. The Nasdaq composite index slipped 3.64 to 1,704.44, while the Standard & Poor's 500 index fell 5.12 to 1,084.78.

Decliners edged advancers on the New York Stock Exchange, with 1,594 down, 1,525 up and 208 unchanged. Volume was 1.3 billion shares, ahead of the 1.1 billion shares traded yesterday.

The NYSE composite index fell 2.82 to 558.63, the American Stock Exchange composite index lost 1.69 to 821.34 and the Russell 2000 index, the barometer of smaller company stocks, fell 3.13 to 427.37.

The Treasury's 2-year note was unchanged at 99 30/32; its yield stayed at 2.77 percent. The 10-year note fell 3/32 to 102 25/32; its yield rose 1 basis point to 4.64 percent. The 30-year bond fell 1/32 to 99 27/32; its yield was unchanged at 5.39 percent.

Among today's losers, agriculture company Monsanto tumbled $4.23 to $32.56, on a loss that was 2 cents a share higher than Wall Street had anticipated.

Pharmacia slid $4.37 to $38.39 after projecting 2002 per-share earnings to be in a range of $1.91 to $1.96, below the $2 Wall Street was expecting. The drug maker's negative outlook overshadowed its third-quarter earnings, which met expectations, and its backing of its 2001 targets.

Lucent fell 26 cents to $6.64 after posting a wider-than-expected loss today.

SBC Communications was the weakest Dow industrial for the second straight session, falling $2.62 to $38.78. Yesterday, SBC missed earnings expectations by a penny a share.

Winners included companies that surpassed or met analysts' earnings expectations. DaimlerChrysler rose 83 cents to $35.86 after beating analysts' forecasts and affirming its full-year targets.

Consumer products maker Kimberly-Clark, which met expectations, advanced $1.14 to $54.36.

Investors were cautious in dealing with companies slated to release earnings at the end of the day. Amazon.com rose 78 cents to $9.55, while Compaq Computer slipped 25 cents to $9.40.

Amazon.com later said its third-quarter loss narrowed as it cut costs at its warehouses. Sales rose 0.2 percent, missing analysts' forecasts, and will fall short again in the fourth quarter. The loss narrowed to $169.9 million, or 46 cents a share, from $240.5 million, or 68 cents, a year earlier. Sales rose to $639.3 million from $637.9 million, the company said. Analysts' average forecast was $650.3 million, according to Thomson Financial/First Call.

Meanwhile, Compaq said it had a third-quarter loss, blaming weak demand and logistical problems. The company also expects a fourth- quarter loss. The loss was $499 million, or 29 cents a share, on sales of $7.5 billion. Compaq had profit of $557 million, or 31 cents, on $11.2 billion in sales in the year-earlier quarter.

The company expects a fourth-quarter loss from operations of 3 cents a share on sales of $7.6 billion to $7.8 billion. Analysts had expected Compaq to break even on sales of $8.2 billion.