NEW YORK >> Wall Street slid to its lowest levels in three months today, as war anxieties and a brokerage downgrade of insurance giant American International Group sparked fears of a faltering economy in the coming months. The Dow Jones industrials dropped about 240 points. Wall Street hits
3-month lowsBy Hope Yen
Associated PressAnalysts say many investors wanted to dump shares ahead of Monday's key report by U.N. officials on arms inspections in Iraq and President Bush's State of the Union address Tuesday. Their comments are expected to signal whether war is imminent.
"It's war jitters," said Larry Wachtel, market analyst at Prudential Securities. "When you have all this nagging uncertainty, you have this abdication. People have backed away and said, 'Let's wait till next week.' "
Declining issues outnumbered advancers about 3 to 1 on the New York Stock Exchange. Volume was moderate.
The Dow fell 238.46, or 2.9 percent, to close at 8,131.01. It was the fourth triple-digit loss in five days, sending blue-chip stocks to their lowest levels since Oct. 16, when they closed at 8,036.03.
The broader market also finished sharply lower. The Standard & Poor's 500 index dropped 25.94, or 2.9 percent, to 861.40, also its lowest level since Oct. 16, when it closed at 860.02. The Nasdaq composite index fell 46.14, or 3.3 percent, to 1,342.13, the lowest finish since Dec. 31.
For the week, the three main indexes posted their second losing week, with the Dow falling 5.3 percent, the Nasdaq dropping 2.5 percent and the S&P 500 losing 4.5 percent.
The Russell 2000 index dropped 8.65, or 2.3 percent, to 375.06 today. It fell 3.4 percent for the week.
The price of the Treasury's 10-year note was up 3/32 point, while its yield fell to 3.92 percent from 3.94 percent late yesterday. The price of two-year Treasury notes was unchanged and their yield held at 1.63 percent.
American International Group dropped $4.89 to $56.04 after Morgan Stanley cut the insurer's stock rating to "equal weight" from "overweight."
CMS Energy lost $2.47, or 28.9 percent, to $6.07 after the company suspended its dividend and said its 2002 net loss would be worse than expected.
Winners included Nortel Networks, which gained 18 cents to $2.58, after the telecommunications equipment maker posted a fourth-quarter loss that was narrower than analysts' expectations; it also expects to achieve profitability, excluding one-time charges, by the second quarter.
Defense contractor Raytheon rose $1.61 to $30.16 after reporting a narrower fourth-quarter loss but posted profits from continuing operations that matched Wall Street estimates.
Overseas, Japan's Nikkei stock average finished 0.7 percent lower. In Europe, France's CAC-40 dropped 0.7 percent, Britain's FTSE 100 declined 0.5 percent and Germany's DAX index slid 3.3 percent.
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