Renewed Enron
worries sink stocks

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By Seth Sutel
Associated Press

NEW YORK >> Concerns over a widening congressional investigation of Enron further soured the market's mood today and sent stocks tumbling. The selloff pulled the Dow Jones industrials down more than 150 points and sent the Nasdaq composite index to its lowest close since November,

The market has now given back nearly all of its gains from this month's big rally. Analysts said investors, doubtful that the economic recovery will be as quick and strong as hoped, didn't want to risk losing profits to another Enron-type scandal.

The Dow closed down 157.90 at 9,745.14. It was the lowest finish since Feb. 7, when the index closed at 9,625.44.

The technology-based Nasdaq tumbled 54.59 to 1,750.61, its worst showing since Nov. 2 when it fell to 1,745.73. The Standard & Poor's 500 index lost 20.84 to 1,083.34.

The NYSE composite index fell 9.17 to 562.08, the American Stock Exchange composite index lost 4.97 to 844.19 and the Russell 2000 index dropped 9.27 to 459.98.

Decliners outnumbered advancers 2 to 1 on the New York Stock Exchange, with 2,118 down, 1,019 up and 207 unchanged.

Volume was light, coming to 1.18 billion shares, compared with 1.36 billion Friday. Stock markets were closed yesterday for the Presidents Day holiday.

The Treasury's 2-year note was unchanged at 100 18; its yield fell 1 basis point to 2.93 percent. The 10-year note lost 18 to 99 3 1/32; its yield rose 2 basis points to 4.88 percent. The 30-year bond lost 1 1/32 to 99 34; its yield gained 2 basis points to 5.39 percent.

Today's losses appeared linked to selling that began Friday on reports about IBM's accounting. A New York Times story today about Enron reminded Wall Street that congressional investigators are widening their probe of the energy trader to include investment firms. The story squelched investors' hopes that the fallout from Enron might soon dissipate.

"This is another excuse to sell in an environment where pessimism has been built up now for two years," said Charles G. Crane, strategist for Victory SBSF Capital Management. "Investors are extremely disgruntled right now. They are thinking they would rather sell into strength than buy into weakness."

Stocks have been trading in a narrow range since the beginning of the year, alternating between losses and gains on questions about earnings and the integrity of corporate bookkeeping. With most corporations still unable to say resolutely that business is improving, investors are finding few reasons to buy.

IBM dropped $3.35 to $99.54 despite news that the company would release more details about its bookkeeping in response to investor concerns about greater disclosure.

Financial stocks also languished, including J.P. Morgan, down $1.02 at $29.03, and Citigroup, off $1.99 at $42.22. Analysts said investors were worried that the institutions would be hurt if the economic recovery turns out to be mild instead of robust.

The few bright spots reflected company-specific news, rather than broader industry moves. Travelocity.com surged $5.71 to $24.91 after Sabre Holdings announced before the market opened it would acquire the remaining stake in the online travel company. Sabre, which already owns 70 percent of Travelocity, was down $2.34 at $42.94.

United Airlines' parent company, UAL, rose $1.59 to $12.95 after the airline reached a tentative contract agreement with the union representing its mechanics and aircraft cleaners, averting a potentially crippling strike.

Also today, the Commerce Department reported construction of new homes and apartments rose 6.3 percent in January to the highest level in almost two years, the latest indication that the sluggish economy might be reviving.