- The Washington Times - Tuesday, June 4, 2002

NEW YORK (AP) Skeptical about corporate accounting practices, investors dumped stocks Monday, sending the Nasdaq Composite Index to its lowest level in eight months and the Dow Jones industrials skidding more than 200 points.
Investors still nervous about companies' books in the wake of Enron's collapse were upset by news that Tyco's CEO had resigned and that Microsoft had agreed to settle charges that it misrepresented its finances. The market disregarded two positive economic reports on manufacturing activity and construction spending in the process.
"It makes it very difficult for people to invest in the market when they don't have a clue what a company's revenues and profits are," said Al Mirman, strategist at V Finance in Sarasota, Fla. "Companies are reporting profits that are not real. They are restating results. People just don't have confidence in companies."
The Dow closed down 215.46, or 2.2 percent, at 9,709.79. The last time the Dow finished at a lower level was Feb. 7, when it stood at 9,625.44. The index hasn't had a bigger one-day point drop since Feb. 4, when it lost 220.17.
Broader indicators also tumbled. The Nasdaq Composite Index fell 53.17, or 3.3 percent, to 1,562.56, its lowest close since Oct. 2. The last time the Nasdaq suffered a bigger one-day point loss was April 2, when it sank 58.22.
The Standard & Poor's 500 index dropped 26.46, or 2.5 percent, to 1,040.68, while the Russell 2000 index of smaller-companies' stocks fell 13.08, or 2.7 percent, to 474.39.
The sell-off accelerated in the final hour of trading. Analysts attributed this to the Dow having broken below the 9,800 level, which triggered programmed selling. "And no one is around to buy. No one is interested. I throw good economic news at them, and they say, 'So what?'" said Larry Wachtel, analyst at Prudential Securities.
The market has not enjoyed a positive day for all three major indexes at once since May 23, six trading sessions ago. Since then, the Dow has slid 509.29, or 5.0 percent. The Nasdaq has lost 135.07, or 8.0 percent, and the S&P; 500 has retreated 45.34, or 4.2 percent.
Tyco slid $5.90, or nearly 27 percent, to $16.05 on news that CEO L. Dennis Kozlowski had unexpectedly resigned after reports that he was being investigated for possibly avoiding paying sales taxes.
Microsoft fell $1.49 to $49.42 after agreeing to refrain from accounting violations as part of a settlement with the Securities and Exchange Commission of charges that the company misstated results.
Energy company El Paso dropped $3.70 to $21.95 following news that Senior Vice President and Treasurer Charles Dana Rice was found dead Sunday in what police said was a suicide.
Analysts said investors are less worried about missing the market's next bull market, and more concerned with protecting their portfolios after two years of decline.
"Investors are saying, 'I just don't want any more pain. I am willing to cut my losses,'" said Thomas F. Lydon Jr., president of Global Trends Investments in Newport Beach, Calif.
Declining issues outnumbered advancers nearly 3 to 1 on the New York Stock Exchange. Volume was light at 1.3 billion shares, but heavier than Friday's 1.23 billion.


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