Halliburton, Novellus news gives Wall Street losing session

AP Business WriterNEW YORK (AP) -- Questions about accounting at Halliburton and a mixed forecast from Novellus weighed on stocks Wednesday, sending the market lower for a third straight session as Wall Street reassessed its timeline for a business recovery.

The tech sector recorded the biggest declines. Analysts said investors, concerned that stock prices are too high, are staying out of the market. The resulting low volume exaggerates gains and losses.

The Dow Jones industrial average closed down 58.54, or 0.6 percent, at 9,923.04, according to preliminary calculations, for a total three-session decline of 293.04. On Tuesday, the index closed below 10,000 for the first time since May 10.

The technology sector pulled back the most, sending the Nasdaq composite index down 27.80, or 1.7 percent, at 1,624.37. The Standard & Poor's 500 index was off 6.89, or 0.6 percent, at 1,067.66.

"If the market were reasonably priced, it could shrug news like this off," said Steven Goldman, chief market strategist with Weeden & Co. "But the market is so fully valued now that we can't do that, we're vulnerable. We are going to have wait for the fundamentals to catch up to stock prices for stocks to go higher."

Halliburton fell 63 cents to $18.72 after the company said the Securities and Exchange Commission is investigating whether the oilfield services company reported cost overruns on construction jobs. Halliburton said it believes its bookkeeping was in line with generally accepted accounting principles.

Wall Street has been dealing with accounting issues for more than six months -- an examination triggered by the collapse of Enron on questionable bookkeeping and energy trading practices.

Enron's problems increased scrutiny of trading practices, and that also affected the market. Energy company El Paso fell $8.26, or 23.4 percent, to $27.01 after announcing it was pulling back from its energy trading business to focus on its natural gas operations.

And CMS Energy dropped 49 cents to $18.05 on word it was selling its exploration and production unit. The move follows the resignation of the company's chief executive amid a trading investigation.

The selling was especially vigorous in the tech sector. Novellus Systems fell $3.27 to $43.40 after the semiconductor equipment maker raised its second-quarter forecast estimates but failed to indicate the improvement would carry over to the third quarter.

And Nortel Networks lost 17 cents to $2.35 after the telecommunications company announced more job cuts and a plan to realign its business, citing the difficult market conditions that might delay a recovery until 2003 or 2004.

Pharmaceutical shares fared better, including Merck, which rose $1.09 to $57.13. The sector is perceived as lower risk, and popular with investors in times of uncertainty.

Stocks have been falling on a mix of earnings concerns and fears there will be more terrorist attacks. Although the market has managed some gains, particularly in smaller and mid-sized companies, most of its upturns have been short-lived as investors quickly cashed in profits.

The overall mood of the market remains glum, and analysts say many investors just don't see a reason to buy.

"There's nothing to get investors excited on a sustained basis about putting their money into stocks," said Charles G. Crane, strategist for Victory SBSF Capital Management. "What we need ... is more evidence that the improving economic data is translating into the sort of profit rebound. That could happen in the second half of this year, but we don't know for sure yet."

Declining issues led advancers 3 to 2 on the New York Stock Exchange. Volume came to 1.06 billion shares compared with 959.499 million shares Tuesday.

The Russell 2000 index fell 4.81 to 487.60.

Overseas, Japan's Nikkei stock average slid 0.7 percent. In Europe, Germany's DAX index fell 0.8 percent, Britain's FTSE 100 rose 0.2 percent, and France's CAC-40 lost 0.1 percent.

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