NEW YORK >> UAL's bankruptcy filing and a brokerage downgrade of IBM put investors in a black mood today, sending stocks sharply lower and the Dow Jones industrials down more than 170 points. Gloomy investors
sell market lowerBy Hope Yen
Associated PressAnalysts said many investors were tempted to sell following the market's recent two-month rally, while others were nervous about the United Nations' search for weapons of mass destruction in Iraq. "The market is still in a malaise," said Charles Pradilla, chief investment strategist at SG Cowen Securities. "You inject the recent news into a market still in the process of taking profits, and you get this real choppy action."
Declining issues outnumbered advancers 5 to 2 on the New York Stock Exchange. Volume was light.
The Dow slid 172.36, or 2 percent, to close at 8,473.41, having fallen 2.8 percent last week to snap an eight-week winning streak. Blue-chip stocks have now declined in the last six of seven sessions to a level not seen since Nov. 13.
The broader market also fell. The Nasdaq composite index declined 55.30, or 3.9 percent, to 1,367.14, also the lowest since Nov. 13. The Standard & Poor's 500 index dropped 20.23, or 2.2 percent, to 892.00. The Russell 2000 index fell 10.43, or 2.6 percent, to 386.29.
The price of the Treasury's 10-year note was up 11/32 point, while its yield fell to 4.04 percent from 4.09 percent late Friday. Two-year Treasury notes were up 1/32 point and yielded 1.85 percent, down from 1.87 percent late Friday.
United Airlines filed for federal bankruptcy court protection today, one of the 10 largest Chapter 11 filings in U.S. history, underscoring the troubles in the airline industry.
IBM, meanwhile, fell $2.73 to $79.59 after Banc of America cut the computer maker's brokerage rating to "market performer" from "buy."
Analysts say investors are still largely upbeat despite recent declines and should bid stocks higher by year's end. After eight weeks of Dow advances, it's expected that some investors would cash in some profits, they said.
"December is usually one of the market's strongest months, but it's usually the last week and a half that we see the gains," said Steven Goldman, chief market strategist at Weeden & Co. in Greenwich, Conn. "Stocks should be set up for some type of year-end rally."
Analysts also say the market remains vulnerable to losses on investor concerns about a war with Iraq and the strength of corporate earnings.
Citigroup dropped $1.41 to $36.15 and J.P. Morgan Chase fell $1.17 to $23.26 on reports that congressional investigators were examining whether the two financial companies helped Enron hide debt or avoid taxes.
Overseas, Japan's Nikkei stock average finished 0.4 percent lower. In Europe, France's CAC-40 fell 2.2 percent, while Britain's FTSE 100 dropped 2 percent and Germany's DAX slid 4.4 percent.
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