Stocks fall on lingering worries about business, Enron

AP Business WriterNEW YORK (AP) -- Sellers resurfaced on Wall Street late Thursday, unloading stocks following the previous sessions' buying binge. Tech suffered the brunt of the selling, and the Nasdaq composite index fell to its lowest close since Halloween on a revenue warning from Ciena and a reduced earnings forecast for Intel.

"It's dispirited selling," said Richard E. Cripps, chief market strategist for Legg Mason of Baltimore. "You are not getting any sense that the market wants to go higher."

The Dow Jones industrial average closed down 106.49, or 1.1 percent, at 9,834.68, giving up an earlier advance of 88.69, according to preliminary calculations. Many analysts doubed the Dow could sustain its rally from Wednesday when it surged 196.03.

The broader market also finished lower. The Nasdaq composite index fell 59.23, or 3.3 percent, to 1,716.34, its lowest close since Oct. 31 when the Nasdaq stood at 1,690.20.

And the Standard & Poor's 500 index declined 17.02, or 1.6 percent, to 1,080.96.

The Dow briefly passed the 10,000 level soon after the Philadelphia Fed reported at midday that activity in the region's manufacturing sector improved in January for the second consecutive month. But the blue chips gave up their gains -- not a surprising development, considering the market's continuing gloom.

"We were not up with up any enthusiasm. So, traders decided the rally was going to fail, and they sold into it," said Bill Barker, investment strategy consultant at RBC Dain Rauscher. "It was a weak rally to begin with. Traders were nervous going into it."

Selling has ruled the market so far this year as investors have been steeped in worries about the economy, earnings and the accuracy of corporate accounting.

"I find a sense on the Street of unwillingness to buy because there is no catalyst to turn you on," said Larry Wachtel, market analysts at Prudential Securities. "There are signs that the economy is recovering, but that appears void in face of this accounting situation."

Earnings forecasts and Enron-related fears again contributed to the market's slide Thursday.

Ciena fell nearly 13 percent, down $1.10 at $7.60, after the networker cut its second-quarter revenue estimate about 40 percent below analysts' forecasts.

Intel tumbled $1.96 to $29.48 after Banc of America Securities lowered its 2002 earnings estimate for the chip maker to 65 cents from 69 cents.

Investors again turned away from companies whose business stands to suffer in the aftermath of Enron's collapse.

American International Group fell $2.68 to $71.04 the day after a senior executive warned that the insurance industry faces an overwhelming number of claims on policies covering shareholder lawsuit liabilities, according to a report by Dow Jones Newswires.

There were just five gainers among the Dow industrials. Boeing rose 90 cents to $44.21, and Alcoa advanced 87 cents to $37.48.

Investors had little reaction to an improvement in an index that forecasts the future health of business. The Conference Board said its index of leading economic indicators rose 0.6 percent in January, meeting analysts' expectations.

A report on the U.S. trade deficit in 2001 also had little effect on the market. The Commerce Department said last year's deficit retreated 7.8 percent from where it stood in 2000, the first improvement in six years as the recession reduced the nation's spending on foreign goods. Still, the $346.3 billion imbalance was the second-largest deficit in history.

The Russell 2000 index, the barometer of smaller company stocks, fell 8.82, or 1.9 percent, to 458.43.

Declining issues outnumbered advancers 17 to 13 on the New York Stock Echange. Volume was moderate.

Overseas, markets were higher Thursday. Japan's Nikkei stock average surged 4.7 percent on renewed hope in a government plan to bail out the nation's bad bank loans and a rally in technology.

In Europe, France's CAC-40 finished up 1.0 percent, Britain's FT-SE 100 rose 1.0 percent, and Germany's DAX index gained 1.5 percent.

------On the Net:

New York Stock Exchange: http://www.nyse.com

Nasdaq Stock Market: http://www.nasdaq.com