- The Washington Times - Tuesday, April 30, 2002

NEW YORK (AP) Troubles in the telecommunications sector sent stocks sharply lower yesterday as Wall Street looked past evidence of healthy consumer spending and worried that business won't recover enough to justify higher stock prices.
Analysts said investors were becoming even more reluctant to invest for fear stocks are in for a third-straight disappointing year. Trading volume was light another indication that buyers are staying away.
"The overall pressure tells you there isn't enough oomph to get a new bull market, even from these levels," said Charles Pradilla, chief investment strategist at SG Cowen. "There are real questions as to how sustained the recovery is going to be as far as profits are concerned, and people are worried."
The Dow Jones Industrial Average closed down 90.85, or 0.9 percent, at 9,819.87, its second-straight close below 10,000 and weakest finish since Feb. 19, when it stood at 9,745.14.
Broader stock indicators also slipped. The Standard & Poor's 500 index fell 10.87, or 1.0 percent, to 1,065.45, while the Nasdaq Composite Index dropped 6.96, or 0.4 percent, to 1,656.93. Both indexes are trading at levels last seen in late October and early November.
The Commerce Department reported that consumer spending and incomes rose by 0.4 percent in March. The figures were in line with analysts' expectations and provided more evidence that consumers, who account for two-thirds of the economy, are still spending.
That wasn't enough to impress investors, who increasingly agree that the economy is in a recovery but have yet to see similar indications in business. This week marks the end of the first-quarter earnings reporting season, but so far, most of the numbers released have failed to convince investors that better days are ahead for stock prices.
As a result, the market has become increasingly skittish, interpreting any signs of weakness in a company or sector as reason to sell.
In trading yesterday, Qwest Communications fell 79 cents to $4.96 as a judge in Minnesota began hearing evidence regarding confidential agreements the company had made with competitors. Qwest is scheduled to release its earnings today.
The broader telecommunications sector also retreated. Worldcom shares tumbled 92 cents, or 28.1 percent, to $2.35, a 52-week low. SBC Communications lost $1.25 to $30.15, while AT&T; fell 44 cents to $12.86. SBC and AT&T; are Dow components.
Tyco slid $2.90 to $17 as part of a continuing sell-off that began late last week when the company changed its mind about splitting up.
And DuPont fell 63 cents to $43.27 on word its textile business would cut more than 2,000 jobs, or 10 percent of its global work force.
Yesterday's sell-off was the latest in a monthlong pullback by stocks that has accelerated in recent sessions. Since the start of 2002, the Dow has dropped 2 percent, the Nasdaq has fallen 15.1 percent and the S&P; is down 7.2 percent.
"There's really not a whole lot to get excited about right now," said Todd Clark, head of listed equity trading at Wells Fargo Securities. "This is just more follow-through on the weakness we've been seeing."
Declining issues led advancers 3 to 2 on the New York Stock Exchange. Consolidated volume came to 1.61 billion shares, compared with 1.64 billion Friday.

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