NEW YORK >> A bleak earnings forecast from Ericsson brought out more skeptics on Wall Street today, triggering a sharp stock selloff amid concerns that business isn't strong enough to justify higher stock prices. Telecom problems sink stocks
By Lisa Singhania
Associated PressThe Dow Jones industrials fell 1.2 percent, while the Nasdaq composite index lost more than 2.1 percent of its value. Analysts, noting that trading volume was relatively light, said the market was suffering from investors' apathy and frustration.
The Dow closed down 120.68 to 10,136.43. The Nasdaq tumbled 38.15 to 1,758.68. The Standard & Poor's 500 index dropped 17.34 to 1,107.83.
Decliners led advancers nearly 2 to 1 on the New York Stock Exchange, with 1,969 down, 1,197 up and 198 unchanged. Volume was 1.16 billion shares. The NYSE composite index lost 7.73 to 586.05, the American Stock Exchange composite index fell 3.14 to 921.58 and the Russell 2000 index fell 6.47 to 510.93.
The Treasury's 2-year note was unchanged at 100 1832; its yield remained at 3.31 percent. The 10-year note rose 18 to 97 2 1/32; its yield fell 2 basis points to 5.18 percent. The 30-year bond gained 18 to 95 2532; its yield slipped 1 basis point to 5.67 percent.
Investors sold Ericsson after it announced up to 17,000 job cuts, about 20 percent of its work force, and reduced its forecast for future quarters. The stock lost 80 cents, or 22.6 percent, to $2.74. The news was the latest difficulty for the troubled telecom sector.
Ericsson's performance also made Wall Street nervous about other telecom stocks. AT&T tumbled 75 cents, or 5.2 percent, to $13.75, ahead of earnings due out later this week. SBC Communications lost $1.06 to $31.66. Both companies are Dow stocks.
Among the biggest losers was WorldCom, which fell $1.97, or 32.9 percent, to $4.01. The telecom company reduced its 2002 financial outlook Friday for its WorldCom Group because of weaker sales in its data and phone services.
Lucent Technologies, the biggest U.S. maker of telephone equipment, said today it will eliminate about 6,000 more jobs, or 11 percent of the company's work force, after second-quarter sales slid 40 percent. Its loss for the period ended March 31 narrowed on lower costs. The work force will be pared to about 50,000 people by the end of September from 56,000 last quarter, Lucent said.