NEW YORK (AP) — Rising concern over violence in the Middle East gave investors yet another reason to sell yesterday, sending the Dow Jones Industrial Average down 135 points despite another round of solid earnings reports.
With the growing possibility of higher interest rates an ongoing concern on Wall Street, analysts said investors already inclined to pull money out of the market were further unnerved by developments in the Middle East.
“I think the quagmire of geopolitical news is basically what’s keeping the market from responding to the good economic news and good earnings reports,” said Peter Cardillo, strategist at S.W. Bach & Co.
The Dow plunged 135.56, or 1.3 percent, to 10,342.60.
Broader stock indicators also dropped sharply. The Standard & Poor’s 500 index was down 15.70, or 1.4 percent, at 1,122.41, and the Nasdaq Composite Index fell 42.99, or 2.1 percent, to 1,989.54.
The overseas news had a greater impact yesterday because there was no fresh economic news to help investors assess the speed of the economic recovery. Many investors held firm or sold off ahead of three key reports coming in over the next week. The first-quarter gross domestic product report is due today, the Federal Reserve is set to meet Tuesday to discuss rates and the April employment data is expected next Friday.
With yesterday’s loss, the major indexes erased the gains made over the past four sessions. The sell-off hit nearly every sector.
Pharmaceutical company Bristol-Myers Squibb rose 76 cents to $25.48 as it reported earnings that beat expectations by 2 cents and reaffirmed its forecasts for the year.
Nortel Networks Corp. was down $1.60, or 28 percent, at $4.04 after it fired its chief executive, chief financial officer and comptroller in an accounting scandal. The company’s first quarter earnings will be delayed, and it will also review and possibly restate its 2003 earnings as well.
Declining issues outnumbered advancers by 4 to 1 on the New York Stock Exchange, where volume came to 1.85 billion shares, compared with 1.51 billion Tuesday.
The Russell 2000 index of smaller companies fell 13.70, or 2.3 percent, to 577.06.
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