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Dow skids more than 500 on profit forecast worries

(Agencies)
Updated: 2008-10-23 06:32

But materials companies fell as commodity prices fell. Aluminum producer Alcoa Inc. fell $1.63, or 13.4 percent, making it the steepest decliner among the 30 stocks that make up the Dow industrials. Miner Freeport-McMoRan Copper & Gold Inc. fell $5.82, or 17.8 percent, to $26.92.

Energy issues fell as oil slid to its lowest level in 16 months. Exxon Mobil Corp. fell $6.93, or 9.7 percent, to $64.57, while Chevron Corp. fell $5.06, or 7.6 percent, to $61.74.

The decline in oil helped airlines. JetBlue Airways Corp. rose 2 cents, or 0.40 percent, to $5.01, and United Airlines parent UAL Corp. rose 85 cents, or 6.2 percent, to $14.65.

In corporate news, AT&T Inc. said its third-quarter earnings rose 5.5 percent but missed analyst expectations in part because of strong sales of iPhones, which the carrier subsidizes. The stock fell $1.95, or 7.6 percent, to $23.78.

Wachovia fell 38 cents, or 6.2 percent, to $5.71 after reporting its results. Merck slid $1.96, or 6.5 percent, to $28.01.

Some tech names advanced. Apple rose after the company reported a 26 percent increase in its fiscal fourth-quarter earnings. The stock rose $5.38, or 5.9 percent, to $98.87. Yahoo reported a 64 percent drop in third-quarter profits but said it would cut at least 1,500 jobs, cost-cutting that appeared to please investors. The shares rose 32 cents, or 2.7 percent, to $12.39.

Thornton said the latest corporate forecasts are difficult to rely on because companies are grappling with many of the same unknowns that investors are struggling with, primarily the extent of weakness in the economy.

"These markets are making it difficult to gauge how much to read into management comments because clearly they're dealing with unprecedented change in fundamentals. It's hard to take their word on their outlook," he said.

Declining issues outnumbered advancers by about 5 to 1 on the New York Stock Exchange, where volume came to 1.56 billion shares.

The Russell 2000 index of smaller companies fell 28.68, or 5.40 percent, to 501.97.

Markets overseas fell sharply. Japan's Nikkei stock average fell 6.79 percent. Britain's FTSE 100 fell 4.46 percent, Germany's DAX index fell 4.46 percent, and France's CAC-40 lost 5.10 percent.

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