NEW YORK — Wall Street started 2001 on a sour note Tuesday, unnerved by the same problems that sent the market plunging last year.
The Nasdaq composite index fell 7.2 percent as investors, anxious about the slowing economy and its effect on corporate profits, again unloaded technology issues. The losses extended a trend that made 2000 the worst year ever for the Nasdaq and the weakest in nearly two decades for the Dow Jones industrials.
“Even though the market has come down a lot, the short-term news doesn’t look positive, so y ou’re not seeing new money coming in off the sidelines,” said Robert Harrington, head of listed equity trading at UBS Warburg. “Investors are reluctant to commit. They are genuinely concerned about the slowdown in the economy, and the bad news doesn’t give them a reason to act any differently.”
Indeed, the market spent most of the day focused on earnings, with some of the most visible hemorrhaging in technology issues.
Analysts said the declines reflect worries that have dogged the market since Labor Day. Investors are no longer confident that companies, particularly those in the high-tech sector, can deliver results worthy of even reduced stock valuations.
— The Associated Press
The Federal Reserve last month hinted that interest rate cuts are a possibility in the near future, but that prospect alone hasn’t been enough to cheer Wall Street.
“The ray of sunshine here in the Nasdaq are some of the semiconductor names. Stocks like Intel and Applied Materials that have already beaten down seem to be holding their ground,” said Scott Bleier, chief market strategist at Prime Charter.
Intel rose $1 to $31.06 and Applied Materials gained $1.31 to $39.50.
A report Tuesday from the National Association of Purchasing Management showing manufacturing activity in December was at its lowest level in nearly a decade added to the sense that the economy is weakening.
The session also marked the market debut of J.P. Morgan Chase, the investment firm formed when J.P. Morgan and Chase Manhattan merged, effective Dec. 30. Shares fell $1.44 to $44.
Declining issues led advancers 3-to-2 on the New York Stock Exchange. Consolidated volume came to 1.36 billion shares, compared with 1.02 billion Friday.
The Russell 2000 index tumbled 21.04 to 462.49, a 4.4 percent decline.
Overseas, Japan’s Nikkei stock average closed down 1.2 percent. Germany’s DAX index fell 2.2 percent, Britain’s FT-SE 100 slipped 0.7 percent, and France’s CAC-40 lost 2.2 percent.
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