Nasdaq mired
near Sept. 21 low

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By Lisa Singhania
Associated Press

NEW YORK >> Doubts about technology overshadowed positive news from Boeing and DuPont today, forcing the stock market to give up a moderate advance and close sharply lower. The Dow Jones industrials fell 155 points.

The Nasdaq composite index finished within a point of its lowest close following the Sept. 11 attacks as the market's major indicators all fell to new lows for the year.

The selling wiped out all of the gains from yesterday's rally. Analysts, attributing the volatility to Wall Street's lack of confidence, said that until business conditions show solid improvement, investors will sell their stocks as soon as they make even a small profit.

"An upswing has to be driven by better profits and increased corporate spending. That has yet to happen," said Subodh Kumar, chief investment strategist for CIBC World Markets.

The Dow closed down 155.00 at 9,126.82 after rising as much as 131 points in earlier trading. It was the average's fourth triple-digit decline in five sessions, for a total point loss of 579.30 since Wednesday.

The technology-focused Nasdaq fell 36.35, or 2.5 percent, to 1,423.99 -- less than a point above its Sept. 21 finish of 1,423.19, its lowest close following the terror attacks.

The Standard & Poor's 500 index lost 16.58, or 1.7 percent, closing at 976.14.

Decliners led advancers 3 to 2 on the New York Stock Exchange, with 1,805 down, 1,431 up and 181 unchanged. Volume came to 1.48 billion shares compared with 1.55 billion yesterday.

The NYSE composite index fell 7.27 to 526.64, the American Stock Exchange composite index lost 8.54 to 896.37 and the Russell 2000 index fell 6.64 to 452.45. The S&P is fewer than 10 points above its Sept. 21 low, while the Dow has 891 points to go.

The Treasury's 2-year bond rose 332 to 100 2532; its yield fell 5 basis points to 2.82 percent. The 10-year note gained332 to 100 1432; its yield lost 1 basis point to 4.82 percent. The 30-year bond was unchanged at 98 2732; its yield remained at 5.46 percent.

Wall Street started the session with an advance as investors sought to extend a modest rally yesterday that gave the three indexes their first win in a week. Word of more orders at Boeing and improving sales at DuPont helped push stocks higher.

But the effort quickly faded on mixed economic news.

The Conference Board reported consumer confidence fell to a four-month low in June amid concerns about job security and uneasiness about corporate accounting scandals. The figures were in line with expectations, but the decline was still notable. Consumer spending accounts for two-thirds of the economy, and many strategists say a strong consumer is key to a business recovery.

Profit-taking intensified throughout the day as investors decided they were better off locking in their gains, particularly in technology. Cisco Systems dropped 61 cents, or 4.3 percent, to $13.45. Lucent tumbled 31 cents, or 13.6 percent, to $1.97 on a downgrade by Morgan Stanley, compounding a selloff yesterday on critical comments by UBS Warburg.

"The fundamentals haven't changed. Things are still lousy, particularly in technology," said Jack Francis, managing director and head of Nasdaq trading at UBS Warburg.

With second-quarter earnings reports due out next month, many investors are reluctant to make any new commitments. They want to see whether those numbers, along with any forecasts for the future, indicate whether the market will recover this year. Those companies that suggest disappointment face tough reaction.

Federal Express fell $8.02 to $48 today after beating quarterly estimates, but offering estimates for the current quarter below many analysts' projections.

The Memphis, Tenn.-based package delivery company reported net earnings of $236 million, or 78 cents per share for the quarter that ended May 31. That compares with earnings a year ago of $113 million, or 38 cents per share. Analysts had been expecting 77 cents per share.

The company said FedEx Express, its guaranteed on-time delivery network, showed significant growth, largely related to a new deal with the U.S. Postal Service. FedEx Ground, its truck delivery operation, also saw volume increases attributed in part to its home delivery service.

But the company estimated its performance in the first quarter of the new fiscal year will be 40 cents to 50 cents per share. Analysts surveyed by Thomson/First Call had been predicting 54 cents per share.

Rite Aid rose 13 cents to $2.68 after the drug store chain reported a narrower-than-expected quarterly loss.

Also today, the Federal Reserve began a two-day meeting but no decision on interest rates was expected until tomorrow.

Overseas, Japan's Nikkei stock average rose 0.2 percent.

In Europe, Germany's DAX index advanced 1.8 percent, Britain's FTSE 100 rose almost 2.0 percent, and France's CAC-40 gained 2.7 percent.