Dow falls 390 points

NEW YORK (AP) -- The Dow Jones industrials crashed through their post-terror attack lows Friday in a dramatic 390-point selloff, after news of a government investigation at Johnson & Johnson gave already uneasy investors another reason to pull back.

It was the average's seventh biggest point-drop ever, and its lowest close in nearly eight years. Analysts attributed the declines to Wall Street's unwillingness to make any bets in a market that appears capable of only falling farther.

"There is just no good news out there right now, and people are not willing to get involved in the market going into a weekend," said Bryan Piskorowski, market commentator at Prudential Securities. "You've got a buyers' strike going on."

The declines also gave the three major indexes their ninth straight losing week -- and reflected trends that have been doggin stocks for months now. Investors, fed up with accounting scandals and concerned that business isn't recovering strongly or quickly enough, have been unloading shares for fear stock prices will fall further.

The Dow closed down 390.23, or 4.6 percent, at 8,019.26, according to preliminary calculations, after falling as much as 442 points in the final minutes of the session. The finish put the average 216 points beneath the Sept. 21 close following the terrorist attacks. It was also the Dow's seventh biggest one-day point drop ever, falling behind a 436.37 point drop made on March 12, 2001.

Broader stock indicators, which have been trading below their Sept. 21 lows for a while, also retreated. The Nasdaq composite index fell 37.90, or 2.8 percent, to 1,319.05, and the S&P tumbled 33.34, or 3.8 percent, at 848.22.

Johnson & Johnson dropped $7.88, nearly 16 percent, to $41.55 after The New York Times reported that the FDA and the Justice Department investigating a company factory that makes an anemia drug linked to illnesses in Europe and Canada. The company told the newspaper that it was aware of a government investigation, but did not know its precise nature.

A new slew of earnings reports also captured investors' attention.

Merck fell 50 cents to $41.50 after reporting second-quarter results in line with expectations despite a 4 percent drop in profits.

In the tech sector, Microsoft fell $1.55 to $49.56 after beating analysts' expectations but reducing its forecast for later this year.

Sun Microsystems fell $1.55 to $4.25, a new 52-week low, after reporting results in line with expectations, but indicating its current quarter's results are being affected by difficult business conditions.

The selling quickly spread across the market. American Express dropped $1.88 to $31.65, while ExxonMobil tumbled $2.35 to $32.40. Not a single stock in the Dow managed to end regular trading with a gain.

Declining issues led advancers nearly 4 to 1 on the New York Stock Exchange. Volume was heavy.

The Russell 2000 index fell 10.52 to 386.19.

Overseas, Japan's Nikkei stock average slid 2.8 percent. In Europe, Germany's DAX index fell 5.1 percent, Britain's FTSE 100 slipped 4.6 percent, and France's CAC-40 lost 5.4 percent.

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