- Two subjects of interest in 1992 homicide to take polygraph tests (1/15/17)8
- Business notebook: Jackson salon owner also opens a clothing store (1/16/17)
- Young Elvis impersonator from Bernie performs on 'Ellen DeGeneres Show' (1/12/17)
- Cape SportsPlex contractor offers a look at the project (1/15/17)14
- Meat-processing plant faces $70K penalty for Clean Water Act violations (1/17/17)3
- Two men shot after argument; houses also struck by bullets (1/12/17)21
- Area hospitals hope a box helps prevent infant deaths (1/19/17)6
- Two Cape men recovering after shooting (1/13/17)
- Obama shortens sentence of inmate from Cape (1/19/17)6
- Subjects of interest in 1992 killing take polygraph tests; results not revealed (1/18/17)2
Stocks drop amid profit taking, terrorism fears
AP Business WriterNEW YORK (AP) -- Growing fearful of terror attacks, investors opted for safety Tuesday, securing profits and sending stocks sharply lower for a second day. The market's uneasiness wiped out early gains prompted by better-than-expected retail earnings and a settlement for Merrill Lynch.
Analysts said the pullback, although expected following last week's big rally, was exacerbated by fears of more terrorist attacks. Wall Street's losses widened late Tuesday after the FBI warned New York law enforcement officials of an uncorroborated threat of terrorism involving landmarks like the Statue of Liberty and Brooklyn Bridge.
"It's more of the geopolitical fears. Most of the corporate news is positive. The retail stores beat expectations, and so the consumer is still in the market. ... But there's lot of rhetoric about the next terrorism attack. When it will be, and where?," said Arthur Hogan, chief market analyst at Jefferies & Co.
The technology sector registered the biggest drop, having enjoyed the sharpest gains last week. The Nasdaq composite index closed down 37.40, or 2.2 percent, at 1,664.19, according to preliminary calculations. The Nasdaq, which fell 39.80 Monday, jumped 140.54, or 8.8 percent, last week.
The market's other major indexes also dropped. The Dow Jones industrial average fell 123.79, or 1.2 percent, to 10,105.71. Combined with Monday's 123-point drop, the Dow has lost more than half of last week's 413.16-point gain.
The Standard & Poor's 500 index sank 12.00, or almost 1.1 percent, to 1,079.88.
It was the second straight day that fears about terror attacks prompted selling. On Monday, stocks fell after the FBI said that suicide bombings in the United States are inevitable and Vice President Dick Cheney on Sunday warned that terrorism threats should be taken seriously.
"There is so much caution in the air. The mounting anxiety of terror attacks and the uneven economic recovery have been responsible for a rather-be-safe-than-sorry mode," said Alan Ackerman, executive vice president of Fahnestock & Co.
Retailing shares fell, despite a string better-than-expected first-quarter earnings that included those of Home Depot and Target. Ackerman attributed the decline to sector rotation as investors took profits from retail shares to invest in areas they believe to be undervalued.
Home Depot sank $3.60, or 7.4 percent, to $44.90 as its shares were downgraded by A.G. Edwards to "hold" from "buy." Target fell $1.16 to $41.54.
Technology gave back some gains from last week when good news, such as better-than-expected earnings from Applied Materials and Dell Computer prompted buying. Applied Materials fell 47 cents to $26.10, and Dell, which also issued an upbeat outlook last week, stumbled 35 cents to $26.67.
IBM fell $1 to $83.45, having last week rallied on promises to cut costs. Microsoft dropped $1.82 to $52.19 after announcing it will spend $2 billion over five years to try to boost sluggish sales of its Xbox video game console.
But Tuesday's session produced some gainers, though no sector enjoyed a universal advance.
Merrill Lynch rose 47 cents to $43.85 after settling charges by New York attorney general Eliot Spitzer that it misled investors with its stock ratings to garner lucrative investment banking fees.
But Merrill Lynch's competitors pulled back. Goldman Sachs fell $1.04 to $79.20, and Morgan Stanely fell 96 cents to $48.39.
The auto sector was also mixed. Ford advanced 85 cents to $17.58 after Merrill Lynch raised its near-term rating to "strong buy" from "neutral." But General Motors fell 93 cents to $64.94.
Declining issues outnumbered advancers nearly 2 to 1 on the New York Stock Exchange where volume was light at 1.17 billion shares, but ahead of Monday's 991.30 million shares.
The Russell 2000 index, the barometer of smaller company stocks, fell 7.71, or 1.5 percent, to 495.46.
Overseas, Japan's Nikkei stock average finished Tuesday down 0.5 percent. In Europe, France's CAC-40 each slipped 0.04 percent, Britain's FTSE 100 declined 0.2 percent, and Germany's DAX index fell 0.3 percent.
On the Net:
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