- The Washington Times - Saturday, October 5, 2002

NEW YORK (AP) More mixed economic news and earnings warnings sent stocks tumbling yesterday, with the Dow Jones Industrial Average falling near a five-year low and all the major indexes enduring their sixth straight losing week.

Analysts said investors remained jittery after several weeks of earnings warnings. A labor dispute that shut down 29 West Coast ports and threatened to sap billions of dollars from the economy added to the gloom, as did continuing tensions with Iraq.

"The market just keeps grabbing onto bad news and locking in on that," said Scott Wren, equity strategist for A.G. Edwards & Sons. "Between Iraq and the West Coast port situation, those are two obvious huge extraneous events that are also weighing on the market."

The Dow dropped 189 points, or 2.5 percent, to 7,528, the lowest finish since Nov. 13, 1997, when it closed at 7,488. The average has closed with triple-digit gains or losses in nine of the last 10 sessions.

Broader stock indicators also retreated. The Standard & Poor's 500 index fell 18.4, or 2.2 percent, to 801, and the Nasdaq Composite Index lost 26 points, or 2.2 percent, to 1,140.

For the week, the Dow lost 2.3 percent, the Nasdaq declined 4.9 percent and the S&P fell 3.2 percent.

Analysts say with the bear market approaching the three-year mark, many investors have lost their appetite for stocks and are avoiding buying for fear of seeing their already battered portfolios lose more value.

"Probably the biggest factor in the market not doing well right now is that companies are just not saying they're making money. Every time you turn around, there's another company talking about how the quarter's not going well," said Stephen Massocca, president of Pacific Growth Equities.

Tensions with Iraq have further intensified the volatility, with uninspiring economic data giving investors yet another reason to avoid stocks.

Indeed, the latest figures released yesterday were mixed. The Labor Department reported that the nation's unemployment rate fell to 5.6 percent in September, a slight improvement from the 5.7 percent level of August.

At the same time, a separate government survey of businesses showed that employers cut 43,000 jobs last month the first reduction since April.

Although the unemployment rate was lower than expected, the report still disappointed Wall Street because it suggested that companies are feeling less confident that business is improving.

A new group of earnings warnings added to the malaise.

Declining issues led advancers 7 to 2 on the New York Stock Exchange. Volume was heavy at 1.80 billion shares, compared with 1.67 billion traded Thursday.

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