Accounting concerns send
stocks tumbling

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By Lisa Singhania
Associated Press

NEW YORK >> New questions about accounting practices at Tyco and Enron provoked a broad selloff on Wall Street today as investors grew more doubtful about the honesty of corporate bookkeeping in general.

The Dow Jones industrials tumbled more than 200 points in a sharp decline that accelerated late in the session. Analysts said investors were concerned that other companies might have used the same type of accounting methods as Enron and Tyco. Amid weak corporate earnings forecasts, the news made stock purchases even less appealing.

"There's no trust out there right now. It's a question of which stock do you have in your portfolio that could be the next problem ... so why be invested?" said Barry Hyman, chief investment strategist at Ehrenkrantz King Nussbaum.

The Dow closed down 220.17 at 9,687.09, giving back much of the rebound last week that followed a similar selloff on worries about Tyco and Enron.

Broader stock indicators also fell, with technology issues particularly hard hit. The Nasdaq composite index lost 55.71 to 1,855.53. The Standard & Poor's 500 index was off 27.76 at 1,094.44.

Decliners led advancers more than 2 to 1 on the New York Stock Exchange, with 2,198 down, 935 up and 204 unchanged. Volume was 1.42 billion shares vs. 1.38 billion Friday. The NYSE composite index lost 13.12 to 562.64, the American Stock Exchange composite index fell 7.03 to 836.64 and the Russell 2000 index lost 9.95 to 470.09.

In trading today, Tyco International tumbled $5.73, or 14.1 percent, to $29.90 on reports that it spent about $8 billion in the past three fiscal years on more than 700 acquisitions that were never announced to the public. Standard & Poor's and Fitch, two credit rating agencies, also downgraded and expressed concerns about the economy.

Investors also sent Williams Cos. down $2.64, or 14 percent, to $16.36 after the company said it is prepared to sell more assets and issue more stock to keep its credit rating. In the last week or so, questions have been raised about Williams' obligations to its former telecom subsidiary, the Williams Communication Group, which is facing financial problems. Williams Communications lost 42 cents to $1.

The selling spread to companies that are not under particular scrutiny.

General Electric, another conglomerate with a complex accounting structure, dropped $1.85 to $35.00.

Among tech issues, Ciena dropped $1.88 to $10.12 on worries the optical networking industry will take a while to recover.

The sector is considered to be overpriced by some, making it more vulnerable to selling when investors are worried about future returns.