NEW YORK – Stocks slid Wednesday as the market, wrestling with the threats of war and recession, cut short its partial comeback from last week's rout.
Sentiment was very fragile, with a slew of companies saying they were unlikely to meet financial targets following the Sept. 11 attacks.
The Dow Jones industrial average fell 92.58 points, or 1.07 percent, to end at 8,567.39, according to the latest data, while the Nasdaq composite lost 37.62 points, or 2.51 percent, at 1,464.02. The benchmark Standard & Poor's 500 index fell 5.23 points, or 0.52 percent, at 1,007.04.
"I'm looking through my watch list and I see one positive pre-announcement and six negative,'' said James Schier, who helps oversee $750 million for the Security Benefit Group of Cos. in Topeka, Kansas. "There's no good news out there to make people enthusiastic about stocks.''
Edgy investors pushed the market higher two days in a row after major stock indexes dove about 15 percent last week to new three-year lows. The blue-chip Dow plunged 1,370 points through last Friday's close and racked up its largest weekly loss since the Depression in the 1930s.
Wall Street is largely convinced that economic growth, barely discernible before the Sept. 11 attacks, has turned negative and will lead to recession. But investors are hoping the Federal Reserve's eight interest-rate cuts this year will revive the economy -- and corporate profits -- by next year.
"It's going to be very cautious out there,'' said John Forelli, senior vice president at Independence Investment LLC, which oversees $20 billion. "People are trying to pick their spots. Investors are not going to be willing to jump in until somehow the uncertainty diminishes. There are a lot of stocks out there that are bargains, but people feel if they wait they can get them even cheaper.''
Trading was heavy, with 1.5 billion shares changing hands on the New York Stock Exchange and 1.7 billion on Nasdaq.
Global power company AES Corp. tumbled $12 to $12.25 and ranked as the most active on the New York Stock Exchange. The company cut earnings estimates, blaming in part the weak Brazilian real currency and a drop in British electricity prices.
Oil stocks prices were weak, but not directly because of terrorist worries. Despite some concerns that a Middle East crisis could hurt U.S. oil supplies and access, analysts said the sector fell on investors' greater fears that the economy might tip into recession, creating less demand. Valero Energy dropped 77 cents to 33.41.
Micron Technology Inc., one of the biggest makers of memory chips used in personal computers, dropped $3.99 to $17.25, a 19 percent loss. The company lost $576 million as sales tumbled 79 percent due to a glut of memory chips.
Dow member Caterpillar Inc. dropped $2.31 to $44.07 after the investment firm UBS Warburg slashed its rating on the construction equipment maker.
Intel Corp. shed 45 cents to $21.23 after Wall Street house Goldman Sachs cuts its 2002 earnings estimates on the chip leader amid weak computer demand.
IBM slumped $3.15 to $91.30 after Merrill Lynch & Co. cut its earnings and revenue estimates for the computer giant, citing the business disruption and economic uncertainty caused by the attacks.
Delta Air Lines Inc., up 34 cents to $24.86, said it would cut 13,000 jobs, or 16 percent of its work force, and reduce its flight schedule by 15 percent. Continental Airlines , down 95 cents at $14.50, said it would avoid furloughing 1,000 workers as employees enter its program for voluntary leave of absence.
Primedia dropped $1.62 to $2.60 after warning 2001 earnings would be lower than expected because the attacks further softened the weak ad market.
The Russell 2000 index fell 6.39 to 389.79.
Overseas, Japan's Nikkei stock average dropped 0.5 percent. In afternoon trading, Germany's DAX index was up 3.4 percent, Britain's FT-SE 100 was up 0.2 percent, and France's CAC-40 was up 2.2 percent.
Reuters and the Associated Press contributed to this report.