Selling pushes market even closer to September lows

AP Business WriterNEW YORK (AP) -- Doubts about technology overshadowed positive news from Boeing and DuPont Tuesday, forcing the stock market to give up a moderate advance and close sharply lower. The Dow Jones industrials fell 155 points.

The Nasdaq composite index finished within a point of its lowest close following the Sept. 11 attacks as the market's major indicators all fell to new lows for the year.

The selling wiped out all of the gains from Monday's rally. Analysts, attributing the volatility to Wall Street's lack of confidence, said that until business conditions show solid improvement, investors will sell their stocks as soon as they make even a small profit.

"An upswing has to be driven by better profits and increased corporate spending. That has yet to happen," said Subodh Kumar, chief investment strategist for CIBC World Markets.

The Dow closed down 155.00 at 9,126.82, according to preliminary calculations, after rising as much as 131 points in earlier trading. It was the average's fourth triple-digit decline in five sessions, for a total point loss of 579.30 since Wednesday.

The technology-focused Nasdaq fell 36.35, or 2.5 percent, to 1,423.99 -- less than a point above its Sept. 21 finish of 1,423.19, its lowest close following the terror attacks.

The Standard & Poor's 500 index lost 16.58, or 1.7 percent, closing at 976.14.

The S&P is fewer than 10 points above its Sept. 21 low, while the Dow has 891 points to go.

Wall Street started the session with an advance as investors sought to extend a modest rally Monday that gave the three indexes their first win in a week. Word of more orders at Boeing and improving sales at DuPont helped push stocks higher.

But the effort quickly faded on mixed economic news.

The Conference Board reported consumer confidence fell to a four-month low in June amid concerns about job security and uneasiness about corporate accounting scandals. The figures were in line with expectations, but the decline was still notable. Consumer spending accounts for two-thirds of the economy, and many strategists say a strong consumer is key to a business recovery.

Profit-taking intensified throughout the day as investors decided they were better off locking in their gains, particularly in technology. Cisco Systems dropped 61 cents, or 4.3 percent, to $13.45. Lucent tumbled 31 cents, or 13.6 percent, to $1.97 on a downgrade by Morgan Stanley, compounding a selloff Monday on critical comments by UBS Warburg.

"The fundamentals haven't changed. Things are still lousy, particularly in technology," said Jack Francis, managing director and head of Nasdaq trading at UBS Warburg.

With second-quarter earnings reports due out next month, many investors are reluctant to make any new commitments. They want to see whether those numbers, along with any forecasts for the future, indicate whether the market will recover this year. Those companies that suggest disappointment face tough reaction.

Federal Express fell $8.02 to $48 Tuesday after beating quarterly estimates, but offering estimates for the current quarter below many analysts' projections.

Among the handful of winners, Boeing closed up 13 cents at $42.87 on news it expects an increase in production of commercial aircraft in 2004. DuPont gained 13 cents to $43.24 after the chemical company increased its quarterly forecast citing strong sales.

Rite Aid rose 13 cents to $2.68 after the drug store chain reported a narrower-than-expected quarterly loss.

Also Tuesday, the Federal Reserve began a two-day meeting but no decision on interest rates was expected until Wednesday.

Declining issues led advancers 3 to 2 on the New York Stock Exchange. Volume came to 1.48 billion shares, compared with 1.55 billion Monday.

The Russell 2000 index fell 6.64 to 452.45.

Overseas, Japan's Nikkei stock average rose 0.2 percent. In Europe, Germany's DAX index advanced 1.8 percent, Britain's FTSE 100 rose almost 2.0 percent, and France's CAC-40 gained 2.7 percent.

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