Dow posts worst loss
since attack selloff

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By Lisa Singhania
Associated Press

NEW YORK >> Investors, unsure that the market's month-long recovery will continue, cashed in their winnings today and sent stocks sharply lower. The Dow Jones industrials fell more than 270 points.

Analysts said they weren't alarmed by the decline, however, noting that stock prices have been moving higher for several weeks and were due for a sizable pullback. They also said Wall Street might be playing it safe before consumer confidence, gross domestic pro- duct and unemployment figures are released later this week.

The Dow closed down 275.67 at 9,269.50. It was the index's biggest decline since the precipitous 684-point drop on Sept. 17, when trading resumed following the terrorist attacks.

Broader stock indicators also tumbled. The Standard & Poor's 500 index dropped 26.31 to 1,078.30, while the Nasdaq composite index was down 69.44 at 1,699.52.

Decliners led advancers more than 2 to 1 on the New York Stock Exchange, with 2,080 down, 1,024 up and 209 unchanged. Volume was nearly 1.1 billion shares vs. 1.21 billion on Friday. The NYSE composite index fell 10.73 to 555.85, the American Stock Exchange composite index was unchanged at 837.21 and the Russell 2000 index fell 9.24 to 429.41.

The Treasury's 2-year note rose 1/8 to 100 - 12/32; its yield fell 6 basis points to 2.56 percent. The 10-year note gained 12/32 to 104 - 3/32; its yield fell 5 basis points to 4.48 percent. The 30-year bond gained 1/4 to 101 - 26/32; its yield fell 2 basis points to 5.25 percent.

"Considering the type of strong move we've had in stock prices since Oct. 1, this is really no surprise," said Brian Belski, fundamental market strategist at US Bancorp Piper Jaffray. "A part of this is locking in some gains, the end of month is also approaching and the end of fiscal year for many mutual funds is approaching.

"But I don't see anything different here this week in terms of the negative variables facing the market, whether it's the economic uncertainty or fear about anthrax."

Indeed, the Dow has advanced 4.8 percent since the beginning of the month, while the Nasdaq has risen 13.4 percent and the S&P climbed 3.6 percent. Many stocks have been trading near or, in some cases, exceeding levels not seen since before the attacks; the Dow has come within 30 points of recovering all of the 1,369 it lost after the attacks, while the Nasdaq and S&P have surpassed their Sept. 10 levels.

The Nasdaq still managed to close today above its pre-attack level of 1,695.38.

That makes selling especially attractive to people who bought during the steep market declines that followed the assaults.

With more third-quarter reports expected this week and the middle of the fourth quarter approaching, analysts say selling pressure remains considerable. They also believe worries about more terrorism or fallout from the U.S. air strikes against Afghanistan is making some investors reluctant to hold big positions in the market.

"We've been trying to take profits since last week and even today," said Chris Wolfe, equity market strategist for J.P. Morgan Private Bank. "We feel that the next three weeks are going to have little if any upside surprise in terms of earnings or corporate outlooks. In fact, we expect that as companies give their midquarter updates, there will be more downward revisions."

Dow component Boeing slid $3.93, or 10.4 percent, to $33.75 in reaction to news late Friday that it had lost the largest Defense Department contract in history. Lockheed-Martin, which won the contract, lost 92 cents to $49.

Another Dow component, General Motors, fell $2.64 to $42.76 on word it was selling its Hughes Electronics unit and DirecTV subsidiary to EchoStar Communications for $25.8 billion. Hughes fell 99 cents to $14.36, while EchoStar dropped $1.18 at $24.08.

Tech stocks also were vulnerable, including Dow stock Intel, which fell $1.68 to $24.18, for a loss of 6.5 percent.

The selling contrasted noticeably with last week when investors bought stocks despite mostly lackluster earnings reports and a series of new warnings that business isn't likely to improve soon. Although a number of companies did release earnings in line with analysts' expectations, many of those estimates had been previously reduced on worries that business would be poor.