IBM, Nvidia questions cast
pall over market

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By Lisa Singhania
Associated Press

NEW YORK >> Wall Street fell back today as investors, beset by new accounting concerns at IBM, decided it was time to sell and lock in profits from the week's rally.

A disappointing consumer sentiment survey provided even more incentive to retreat. Analysts said the decline, while not surprising after the market's big move up, reflected investors' ongoing reluctance to commit until earnings are more certain. The tech sector suffered the steepest loss.

The Dow Jones industrial average closed down 98.95 at 9,903.04, pulling back from the 10,000 level it passed by just over a point yesterday. The Dow had gained 376 points in the previous five sessions. Broader indicators also fell, with the tech-focused Nasdaq composite index losing 38.18 to 1,805.19. The Standard & Poor's 500 index fell 12.30 at 1,104.18.

Advancers edged decliners on the New York Stock Exchange, with 1,545 up, 1,541 down and 228 unchanged. Volume came to 1.35 billion shares vs. 1.26 billion yesterday. The NYSE composite index fell 4.41 to 571.25, the American Stock Exchange composite index rose 2.34 to 849.16 and the Russell 2000 index lost 1.50 to 469.25.

The Treasury's 2-year note rose 1/32 to 99 31/32; its yield fell 2 basis points to 3.02 percent. The 10-year note gained 1832 to 100 1/32; its yield fell 7 basis points to 4.87 percent. The 30-year bond jumped 2032 to 100 18; its yield fell 4 basis points to 5.37 percent.

For the week, the Dow gained 1.6 percent, the Nasdaq fell 0.8 percent and the S&P advanced 0.7 percent.

"The market is continuing to vacillate between focusing on the economy and accounting nightmares. Today it's focusing on the accounting," said Barry Hyman, chief investment strategist at Ehrenkrantz King Nussbaum.

IBM slid $5 to $102.89 on reports the technology bellwether used a $300 million sale to lower its fourth-quarter operating costs. The company denied any wrongdoing.

Investors also sent shares of Nvidia down $4.81 to $57.35 after the manufacturer of graphics chips revealed the Secur- ities and Exchange Commission is looking into some of its 2000 and 2001 results.

"IBM is a lot of what's hurting the Dow. But the fact that IBM and Nvidia are both technology companies is really being felt on the Nasdaq," Hyman said. "Investors are starting to wonder about growth stocks in general, and question whether a growth stock become a growth stock through the use of aggressive accounting. Whether that's true or a bad thing, I don't know. But that's the perception."

Indeed, Dell Computer fell 80 cents to $25.60 after the company said slow first-quarter sales should pick up as businesses and other large customers begin spending later this year on replacement technology. The selling spread to retail and financial stocks. Home Depot dropped $1.03 to $50.52, while J.P. Morgan slipped 16 cents to $30.05.

Mixed economic news failed to ease Wall Street's anxiety. Although the government reported a smaller-than-expected increase in inflation and better-than-expected industrial production numbers, a closely followed gauge of consumer sentiment declined.

The University of Michigan's midmonth report on consumer sentiment for February was said to have decreased to 90.9 from 93.0 in January, Dow Jones News reported today. Analysts had expected the index to be unchanged.

The week's gains came on low trading volume, suggesting the support for the advance was not very strong to begin with. And with U.S. markets closed Monday for the Presidents Day holiday, some investors had another reason to sell.

"You don't want to have any big bets out there over a long weekend because the way the news is flowing these days, you never know what could happen," said Rafael Tamargo, director of equity research at Wilmington Trust.