Dow Closes at 4-Year Low
Tumbles 189 points, ending at 7683; NASDAQ, S&P also down

September 24, 2002

NEW YORK — The Dow tumbled to a four-year low and its lowest close of the year Tuesday as investors pulled back on concerns over the economy and the growing possibility of a war with Iraq.

Adding to the malaise was a Federal Reserve decision to leave interest rates unchanged.

The Dow Jones Industrial average ended down 189.02 points, or 2.46 percent, at 7683.13, the lowest close since Oct. 1, 1998. 

The Nasdaq Composite Index closed down 2.76 points, or 0.23 percent, at 1182.17, its lowest close since September 1996.

The broader Standard & Poor's 500 Index ended down 14.43 points, or 1.76 percent, at 819.27.

The Federal Reserve's decision to leave rates unchanged did little to lift the market's spirits, which are down on war jitters and a week of poor corporate earnings reports. 

The central bank left rates at current 40-year lows after a string of 11 cuts last year designed to help spark a turnaround in the nation's economy. The Fed also warned the world's richest economy was at risk of further weakness, particularly amid "heightened geopolitical" tensions.

"The mood is pretty pessimistic. In most traders' minds, there is little reason for people to rush out and buy stocks," said Rick Meckler, president of investment firm LibertyView, which oversees about $1 billion.

Stocks got an initial lift after the New York-based Conference Board said its Consumer Confidence Index fell to 93.3 in September. It was the fourth straight month of decline, but the index beat analysts' forecasts of 92.4.

In trading, decliners included Lehman Brothers, which fell 25 cents to $47.74, after the investment bank reported third-quarter earnings that fell below analysts' expectations.

Maytag Corp., the No. 3 U.S. appliance maker, became the latest manufacturer of big-ticket household items to warn profits will miss expectations as the economy has waned. Shares touched 5-year lows, falling $1.22, or 5.02 percent, to $23.10.

Electronic Data Systems Corp.sank $4.84, or more than 29 percent, to $11.68. Merrill Lynch cuts its investment rating on the computer services company to sell from neutral. EDS lost more than half its value last week after a dismal profit warning. 

El Paso Corp. sank $2.21 to $5.30. JP Morgan and Goldman Sachs cut their investment rating on El Paso after a regulatory ruling that the largest U.S. natural gas pipeline had withheld supply in California. 

Forest products giant Weyerhaeuser Co. lost $5.94, or 11.94 percent, to $43.79. The company said third-quarter profits would fall well short of forecasts, hurt by low wood prices and duties on imports of Canadian softwood lumber. International Paper Co., the world's No. 1 forest products company, fell $2.21, or over 6 percent, to $31.94 and ranked as the largest percentage loser on the Dow.

Semiconductor stocks helped offer support to the market. Intel Corp., the world's largest maker of computer chips, rose 21 cents to $14.34 and helped support the Dow.

IBM declined $3.62 to $59.75 on a bearish brokerage report from Morgan Stanley. 

Office equipment maker Xerox dropped 71 cents, or more than 10 percent, to $5.96. The company said the U.S. attorney's office in Bridgeport, Conn., is investigating its past accounting practices. Xerox had paid $10 million to the Securities and Exchange Commission five months ago to settle charges it manipulated its financial results.

General Electric Co. fell 50 cents, or almost 2 percent, to $25.90 and ranked as the most active share on the New York Stock Exchange. Investment bank JP Morgan cut its 2003 earnings per share view on the conglomerate.

Declining issues outnumbered advancers 9 to 4 on the New York Stock Exchange. Volume was moderate. 

The Russell 2000 index, which tracks smaller company stocks, fell 2.10, or 0.6 percent, to 356.58. 

Overseas, Japan's Nikkei stock average finished lower 1.7 percent. In Europe, France's CAC-40 fell 1.8 percent, Britain's FTSE 100 declined 1.8 percent, and in late afternoon trading, Germany's DAX index was down 1.4 percent.


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