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Tumble below 8000 Original Source Link: (May no longer be active)    http://abcnews.go.com/wire/Business/MarketCoverage.html Stocks Tumble, Dow Drops Below 8,000 http://abcnews.go.com/wire/Business/MarketCoverage.html Stocks Tumble: Dow Industrials End Down 230 at 7,942; Nasdaq Falls 36 to 1,216 The Associated Press Sept. 19, 5:47 pm ET Ñ Another spate of bad economic news, brokerage downgrades and profit declines further demoralized investors Thursday, sending the Dow Jones industrials down 230 points and to their first close below 8,000 in nearly two months. "Investors' emotions continue to drive the market. ... All you see is negative news," said Thomas F. Lydon Jr., president of Global Trends Investments in Newport Beach, Calif., citing an earnings warnings by Electronic Data Systems, disappointing results at Morgan Stanley, a weak housing report and the possibility of war with Iraq. "Investors on Wall Street are clamoring for good news that just isn't there." The Dow closed down 230.06, or 2.8 percent, at 7,942.39. The Dow last traded below 8,000 on Aug. 5, but hadn't closed below that level since hitting a four-year low of 7,702.34 on July 23. The Dow, down nearly 438 points in the past three sessions, has also lost more than 1,100 points since its recent peak of 9,053.64 on Aug. 22 as mixed economic reports and worries about war with Iraq have eroded investors' confidence. The broader market also pulled back Thursday. The Nasdaq composite index fell 35.68, or 2.9 percent, to 1,216.45. The Standard & Poor's 500 index declined 26.14, or 3 percent, to 843.32. It's been more than a week since Sept. 10 that all three indexes have ended a session higher. The three indexes have also endured three straight weekly declines. Disappointing economic news has played a key role in dashing investors' hopes, and contributed to Thursday's decline. The Commerce Department reported housing construction dropped 2.2 percent last month, surprising analysts who expected a 1.8 percent increase from a sector that remained relatively strong when the economy cooled. Homebuilders such as Lennar, down $3.25 at $53.40, were among Wall Street's losers. Dismal earnings and brokerage downgrades also pulled stocks lower. Brokerage house Morgan Stanley fell $4.20 to $33.90 on third-quarter earnings that were 12 cents a share short of expectations. IBM dropped $4.75 to $64.80 after Morgan Stanley cut its price targets and Merrill Lynch lowered its 2002 and 2003 earnings outlook on the Dow industrial. The moves on IBM were in large part due to a third-quarter profit warning by competitor EDS, which itself plunged $19.26, or nearly 53 percent, to $17.20. Coca-Cola declined $1.63 to $47.67 and PepsiCo fell 90 cents to $37.15 after UBS Warburg downgraded each of the companies. Sun Microsystems fell 30 cents to $2.70 after Banc of America cut its rating on the networker to "market perform" from "buy." Some analysts attribute the market's slippage to investors' having expected a more pronounced economic recovery, rather than the more fitful one that is under way. "Investors felt that we had a severe recession, but we didn't have a severe recession. And when you don't have a severe recession, you have a modest bounce back," said Ed Peters, chief investment officer at PanAgora Asset Management in Boston. "And so they are disappointed that we are not getting the bounce they expected," Peters added. "And we are not likely to get it anytime soon. It could be years before we have robust growth." Declining issues outnumbered advancers nearly 4 to 1 on the New York Stock Exchange. Consolidated volume was moderate at 1.85 billion shares, which matched Wedesday's figure. The Russell 2000 index, the barometer of smaller company stocks, fell 11.21, or 3 percent, to 365.54. Overseas, Japan's Nikkei stock average finished Thursday up 2.1 percent. But in Europe, France's CAC-40 fell 2.5 percent, Britain's FTSE 100 lost 1.3 percent, and Germany's DAX index dropped 3.8 percent. On the Net: New York Stock Exchange: http://www.nyse.com Nasdaq Stock Market: http://www.nasdaq.com Copyright 2002 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

Confidence pummeled Deflational spiral { July 23 2002 } Dow 4 year low { September 24 2002 } Dow tumbles july 20 Ecnomy weakens { September 17 2002 } Fears on rise { July 17 2002 } Foriegn investors cautious { August 4 2002 } Free fall dollar Greenspan drepressing effects Greenspan resilient More interest cuts { August 7 2002 } Poverty swells { September 24 2002 } Saudis withdraw { August 20 2002 } Seniors debt Third quarter ratecut Trade decefit record { July 19 2002 } Trade deficit low { June 20 2002 } Tumble below 8000 Unemployment { May 3 2002 } Us weak invest { June 27 2002 } Files Listed: 20

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