Stocks fall on tech warnings, suicide-bombing

AP Business WriterNEW YORK (AP) -- Warnings from Apple, Advanced Micro Devices and Ciena sparked a technology selloff Wednesday, sending the Nasdaq composite index to a new low for the year as Wall Street grew more pessimistic about the timing of a business turnaround. The Dow Jones industrials tumbled more than 140 points.

The market's already downward momentum was accelerated by the second suicide bombing in Israel in as many days. Analysts said the crisis gave investors already skeptical about second-quarter earnings another reason to stay away.

The Dow closed down 144.55, or 1.5 percent, at 9,561.57, according to preliminary calculations, wiping out more than half of its 231-point gain the first two days of the week. It was the Dow's fifth-triple digit move in seven sessions.

Broader stock indicators also fell. The technology-focused Nasdaq slid 46.13, or 3 percent, to 1,496.83. The last time the Nasdaq closed lower was Oct. 2, when it stood at 1,492.33.

The Standard & Poor's 500 index dropped 17.15, or 1.7 percent, to 1,019.99.

"It is looking like revenues for the second quarter will be a bit lighter than expected," said Christopher Wolfe, equity market strategist for J.P. Morgan Private Bank. "That's not making investors too eager to buy."

Apple Computer tumbled $3.03, or 15.0 percent, to $17.12 after saying revenues and profits would be lower than predicted because of soft demand for its products. A similar warning, as well as prediction of a substantial operating loss, sent Advanced Micro Devices down $1.60, or 15.5 percent, to $8.70.

Ciena fell 44 cents to $3.96 after the company said lower third-quarter revenue was possible because of the difficult telecom environment.

The selling spread to other technology stocks. AMD competitor Intel dropped $1.93 to $20.09 after announcing it is shuttering its Web hosting service and taking a $100 million charge in the second quarter.

And Oracle fell 13 cents to $8.80 after reporting quarterly results in line with expectations, but reducing its outlook for the current quarter because of weak corporate spending.

The news was the latest reminder that a much anticipated turnaround in technology -- and the broader market -- might not happen, or at least might be much less robust than hoped. Stocks have been falling all month on a mix of earnings and profit warnings from companies ranging from Intel to Abbott Laboratories. Although there have been occasional bursts of buying, stocks have failed to overcome the mostly negative bias that has been weighing on stocks for weeks now.

Political and military tensions overseas have also been a factor. On Wednesday, a suicide bomber killed seven other people and wounded more than 35 in a Jerusalem neighborhood. Although a similar attack Tuesday failed to spark a selloff, analysts said the combination of more fatalities Wednesday and the technology warnings provided a downward catalyst. Also, later in the session, Israeli helicopters fired rockets in three separate areas of the Gaza Strip.

"Investors have been unsettled by all of the negative news," said Joseph V. Battipaglia, chief investment officer at Ryan, Beck & Co. "They're beginning to worry about whether the economy has durability for the rest of the year."

Still, some stocks benefited from a Commerce Department report showing a bigger-than-expected 11.6 percent increase in housing construction in May, the largest gain since July 1995. Home Depot gained 5 cents to $37.65.

And TRW rose 27 cents to $55.97on word it was selling its aeronautical systems businesses to Goodrich for $1.5 billion. Goodrich lost 33 cents to $28.98. Northrop Grumman, which has been trying to buy TRW for four months, rose $2.80 to $132.50.

Trading volume was low, making the market more vulnerable to sharp swings. Declining issues led advancers 3 to 2 on the New York Stock Exchange, where volume was light.

The approach of what's called a triple-witching session, the quarterly expiration of index futures and index and stock options, on Friday also affected the market.

The Russell 2000 index fell 6.79 to 462.92.

Overseas, Japan's Nikkei stock average fell nearly 3.4 percent. In Europe, Germany's DAX index slid 1.8 percent, Britain's FTSE 100 fell 1.1 percent and France's CAC-40 lost 1.7 percent.

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