Dow tumbles
to 5-year low

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By Hope Yen
Associated Press

NEW YORK >> Prices on Wall Street tumbled today, as bearish brokerage reports for companies such as General Electric and General Motors prompted investors to dump stocks once again. The Dow Jones industrials fell 215 points to hit a five-year low.

"The real problem has been across the board, we've been getting earnings disappointments and downgrades," said Charles Pradilla, chief investment strategist at SG Cowen Securities.

"GE is seen as a paragon of American companies," he said. "The market was not in the mood to have GE taken down and punished in public."

Declining issues outnumbered advancers 6 to 1 on the New York Stock Exchange. Volume was moderate.

The Dow Jones industrial average dropped 215.22, or 2.9 percent, to close at 7,286.27, after rising 79 points yesterday. It was the blue chips' fifth decline in six sessions, sending the Dow to its lowest close since Oct. 27, 1997, when it stood at 7,161.20.

The broader market also finished lower. The Standard & Poor's 500 index declined 21.79, or 2.7 percent, to 776.76. It was the lowest finish since April 28, 1997, when the index closed at 772.96.

The Nasdaq composite index fell 15.10, or 1.3 percent, to 1,114.11. The Russell 2000 index, a barometer of smaller company stocks, fell 8.21, or 2.4 percent, to 330.56.

The price of the Treasury's 10-year note was up 9/16 point today, while its yield fell to 3.57 percent from 3.64 percent yesterday. Two-year Treasury notes were up 7/32 point and yielded 1.66 percent, down from 1.79 percent yesterday.

GE fell $1.35 to $22 after Morgan Stanley lowered its 2003 estimate for the diversified company. General Motors dropped $2.59 to $31.01 after Lehman Brothers and Morgan Stanley cut their outlooks for the world's largest automaker.

Analysts say investors have become increasingly nervous about the fragile economic recovery and tensions with Iraq, leading to six straight weeks of declines on Wall Street.

The market got a boost yesterday on hopes that a port labor dispute on the West Coast would soon end, and indeed, a federal judge approved President Bush's request to reopen the ports, stopping a bitter 10-day lockout.

Still, analysts say investors were worried about the long-term costs of the port dispute, including clearing a backlog of goods that will take weeks. Investors also were unwilling to commit to stocks as they fret over corporate profits amid the third-quarter earnings season.

"The concern out there is that the retailers do not get the goods on the shelves in time for the post-Thanksgiving shopping season," said Jim Russell, director of core equity strategy for Fifth-Third Bank in Cincinnati.

Airline stocks took a hit following a downgrade of AMR, parent of American Airlines, from Credit Suisse First Boston Corp. AMR fell 61 cents to $3.31, while UAL, owner of United Airlines, dropped 21 cents to $1.87.

SunTrust Banks declined $2.65 to $51.79 after reporting earnings that fell short of analysts' expectations.

And J.P. Morgan Chase declined $1.15 to $15.45 on a downgrade from Moody's, which expressed concern about the company's investment banking and capital markets businesses. Standard & Poor's and Fitch previously had lowered their ratings of the bank's debt.

Gainers included Sara Lee, which rose $1.57 to $21.47, after the packaged foods giant raised its first-quarter outlook, citing lower costs. Corning climbed 13 cents to $1.23 after the fiber-optics maker said third-quarter losses would be at the lower end of earlier estimates.

Overseas, Japan's Nikkei stock average finished down 2 percent. In Europe, France's CAC-40 fell 1.4 percent, Britain's FTSE 100 rose 0.3 percent, and Germany's DAX index was down 0.9 percent.