- The Washington Times - Wednesday, September 10, 2003

NEW YORK (AP) — New worries about terrorism and another disappointing tech outlook sent stocks falling sharply for a second straight session yesterday, with technology stocks and the Nasdaq Composite Index bearing the brunt of the selling.

Wall Street’s concerns about terrorism resurfaced with the broadcast of a videotape purportedly of Osama bin Laden; the broadcast, on the Arabic satellite channel Al Jazeera, came one day before the second anniversary of the September 11, 2001, terror attacks.

Meanwhile, Texas Instruments Inc. narrowed its third-quarter revenue estimate, cutting a penny off the high end, just a day after a disappointing revenue outlook from Nokia Corp. prompted investors to turn cautious and lock in some gains from the market’s recent advance. Still, Wall Street had room to pull back after seeing its major stock gauges climb for four weeks running.

“The market was ripe for a sell-off. Obviously, Texas Instruments is helping that sell-off to accelerate,” said Peter Cardillo, president and chief strategist of Global Partner Securities Inc. “But I don’t think it is the beginning of significant pullback. I just think it is a little drop here.”

The tech-dominated Nasdaq closed down 49.62, or 2.7 percent, at 1,823.81, having shed 15.19 Tuesday. The last time the Nasdaq had a bigger one-day loss was July 17, when it forfeited 49.95, or 2.9 percent.

The market’s other major gauges also retreated. The Dow Jones Industrial Average fell 86.74, or 0.9 percent, to 9,420.46, following the previous session’s loss of 79.09. The Standard & Poor’s 500 index fell 12.25, or 1.2 percent, to 1,010.92, after losing 8.47 Tuesday. The Russell 2000 index, the barometer of smaller-company stocks, fell 11.81, or 2.3 percent, to 501.76.

Many analysts say a further retreat can be expected. Wall Street faces some hurdles, including rising interest rates and a jobless economic recovery, that threaten its upward momentum.

Disappointing high-tech earnings forecasts contributed to yesterday’s decline.

Texas Instruments fell $1.90 to $23.42 after shaving a penny off its third-quarter estimate.

The market “has had such a strong run that [stocks] are pulling back,” said Peter Dunay, chief market strategist at Wall Street Access.

, a New York brokerage firm.

Mr. Dunay added: “If companies can’t generate strong revenues it is going to be hard for profits to grow. They can’t keep cutting costs. … It has to translate into stronger earnings to justify the movement we’ve had in the market. You need big growth to go from here. You can’t just kind of get by.”

National City Corp. fell $1.51 to $30.30 after the bank holding company said its 2003 earnings will miss analysts’ expectations, in part because of drop-off in mortgage refinancing in the face of rising interest rates.

Brokerage house downgrades pulled other stocks lower. Micron Technology Inc. dropped $1.35 to $13.35 after Soundview Technology lowered its rating on the semiconductor maker to “neutral” from “outperform.”

Juniper Networks Inc. declined 94 cents to $16.55 after Smith Barney downgraded it to “in-line” from “outperform.”

Declining issues outnumbered advancers about 5 to 2 on the New York Stock Exchange. Consolidated volume totaled 2.03 billion shares, up from 1.88 billion Tuesday.

Overseas, Japan’s Nikkei stock average finished yesterday down 0.6 percent. In Europe, France’s CAC-40 fell 1.4 percent, Britain’s FTSE 100 declined 0.3 percent and Germany’s DAX index lost 1.6 percent.

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