US stocks completed their steepest first-half decline in more than three decades, reflecting concern a rebound in profits is slowing and investor doubts over companies' accounting.
The Dow Jones Industrial Average and the Standard & Poor's 500 Index slid on Friday, erasing early gains in the busiest day in nine months. Xerox Corp plunged after saying it inflated revenue.
That followed by three days WorldCom Inc's statement that it hid almost US$4 billion in costs.
"There is no catalyst that can spark a major rally,'' said Stanley Nabi, who helps oversee US$57 billion at Credit Suisse Asset Management.
The S&P 500 fell 0.82, or 0.1 percent, to 989.82. Health-care stocks such as Pfizer Inc were the biggest drag on the index, while telephone shares such as AT&T Corp added the most. The benchmark has lost 13.8 percent this year, the largest first-half drop since 1970. The Dow fell 26.66, or 0.3 percent, to 9,243.26. The average is down 7.8 percent this year.
The NASDAQ Composite Index gained 5.71, or 0.4 percent, to 1,464.91, trimming its year-to-date loss to 25 percent.
For the week, the S&P 500 rose less than 0.1 percent while the Dow slipped 0.1 percent and the NASDAQ rose 1.7 percent.
Almost two stocks rose for every one that fell on the New York Stock Exchange while three advanced for every two that declined on the NASDAQ Stock Market. More than 2.1 billion shares traded on the New York Stock Exchange. According to preliminary figures, that makes today the exchange's fifth-busiest session and the most-active since Sept. 21.
Xerox slid US$1.03 to US$6.97. The company inflated revenue by US$1.9 billion over the past five years by misreporting the timing and makeup of equipment sales. The US Securities and Exchange Commission fined the company a record US$10 million in April because of the false reporting of about US$3 billion in sales.
Eli Lilly & Co fell US$3.43 to US$56.40 after Lehman Brothers analyst Anthony Butler said the company has had problems "at several of its manufacturing facilities" which could hurt profit growth next year. Butler cut the drugmaker to "buy" from "strong buy."
Other drug shares also declined. Pfizer Inc lost US$1.75 to US$35, Johnson & Johnson dropped US$2.15 to $52.26, Abbott Laboratories fell US$1.50 to US$37.65 and Wyeth shed US$1.48 to US$51.20.
Nike Inc jumped US$2.23 to US$53.65. The company said fourth-quarter profit increased 28 percent as it discounted fewer items.
The world's largest maker of athletic shoes said fourth-quarter profit was US$0.77 a share, beating the US$0.75 average estimate of analysts polled by Thomson First Call.
Media stocks recouped losses incurred on concern that a wave of mergers in recent years left the debt-laden companies susceptible to new scrutiny of their accounting after the WorldCom disclosure.
Clear Channel Communications Inc, the largest radio-station operator, rallied US$0.82 to US$32.02. Viacom Inc, owner of the CBS and MTV television networks, rose US$2.79 to US$44.46, and AOL Time Warner Inc, the largest media conglomerate, rose US$1.08 to US$14.71.
Basic-materials stocks such as International Paper Co gained as investors bet on companies whose business rises most in an expanding economy.
Stocks were bolstered after the University of Michigan reported stronger-than-expected consumer confidence. The sentiment index for June declined less than expected, to 92.4 from 96.9 last month. A preliminary report showed a drop to 90.8.
RSS