Nasdaq drops
to 5-month low

NEW YORK » End-of-quarter selling and growing uneasiness about the economy sent stocks sliding yesterday, with Caterpillar Inc. and other industrials depressing blue chips and technology issues dragging the Nasdaq composite index to a five-month low.

Analysts blamed the selling on portfolio managers looking to unload poor performing stocks before the end of the quarter tomorrow. Investors were also nervously awaiting two key economic reports due on Friday, including the Labor Department's March employment figures and the Institute for Supply Management's monthly report on the industrial sector.

Investors discounted the latest reading of the Conference Board's Consumer Confidence Index, which showed a larger-than-expected drop in confidence for March. The index reading came in at 102.4, less than the 103 forecast from Wall Street and the 104 reading in February.

The Dow Jones industrial average fell 79.95, or 0.76 percent, to 10,405.70, its lowest close since Jan. 24.

Broader stock indicators also gave ground. The Standard & Poor's 500 index was down 8.92, or 0.76 percent, at 1,165.36, also the worst showing since Jan. 24. The Nasdaq composite index lost 18.64, or 0.94 percent, to 1,973.88, the worst close for the index since Oct. 27.

The Nasdaq's drop was on par with the other major indexes, with no real standouts leading the losses, but the new five-month low illustrates how far the technology and small-cap-oriented index has fallen out of favor with investors.

Caterpillar Inc. led the decliners on the Dow, tumbling $4.42 to $89.80 after a Morgan Stanley analyst said the stock was fairly valued and urged investors to collect profits.

Industrials and consumer discretionary stocks fell on fears that consumers would be parsimonious this year, though all the major sectors saw losses for the session. Rising energy prices was also a factor in the selling Tuesday, as they have been all month.

Crude oil prices rose in afternoon trading, with a barrel of light crude settling at $54.23, up 18 cents, on the New York Mercantile Exchange. Bonds recovered from Monday's selling, with the yield on the 10-year Treasury note falling to 4.58 percent from 4.64 percent late Monday.

Wall Street watched closely as the latest move in the MCI-Verizon-Qwest merger battle unfolded. MCI Inc. rose 84 cents to $23.78 after it accepted Verizon Communications Inc.'s improved $7.6 billion offer.