US stocks fell, sending the Dow Jones Industrial Average and Standard & Poor's 500 Index to their biggest weekly declines since the aftermath of the Sept. 11 terrorist attacks.
Home Depot Inc and Wal-Mart Stores Inc, the retailers in the Dow, slumped after an unexpected drop in the University of Michigan index of consumer confidence. The survey suggested growing concern over corporate malfeasance and stocks' losses.
"The problem is investor sentiment," said Edmund Cowart, who helps manage US$6 billion at Eagle Asset Management in St. Petersburg, Florida. "Can you believe the analysts? Can you believe the companies? Can you believe the auditors?"
The Dow fell 117.00, or 1.3 percent, to 8,684.53. The S&P 500 slid 5.98, or 0.6 percent, to 921.39. Consumer-related and phone shares led the decline.
The NASDAQ Composite Index lost 0.93, or 0.1 percent, to 1,373.50, erasing an early gain triggered by Dell Computer Corp, which lifted forecasts for sales and earnings.
In a week that included President George W. Bush's attempt to calm investor fears with a speech on Wall Street, the S&P 500 lost 6.8 percent and the Dow 7.4 percent. They haven't fallen that much since the week ended Sept. 21, when trading resumed after the destruction of the World Trade Center. The NASDAQ declined 5.2 percent this week.
Disclosures of earnings overstatements and other accounting missteps at companies such as WorldCom Inc. drove the S&P 500 and NASDAQ to their lowest levels since 1997 on Wednesday. This year's losses have wiped out US$2.3 trillion of stock-market wealth.
This week, Qwest Communications International Inc. said it's the subject of a criminal probe. Bristol-Myers Squibb Co said the Securities and Exchange Commission is looking into whether it deceived investors by inflated sales.
More than four stocks fell for every three that rose on the New York Stock Exchange Friday, while nine declined for every eight that advanced on the NASDAQ Stock Market. Almost 1.6 billion shares traded on the Big Board, 13 percent more than the three-month daily average.
The Michigan preliminary July consumer sentiment index fell to 86.5, a seven-month low, from 92.4 in June. The drop was the biggest since the index dropped 10 points in September.
Eagle's Cowart said the stock market is affecting the outlook of consumers as investment gains they may have had in the late 1990s have mostly evaporated. "Anybody who got into the market in the past five or six years, they're starting to dip into their capital," he said.
Consumers may buy less, which hurts the economy, Cowart said, and they are already pulling money from stock mutual funds, which hurts the market. Some of his clients have redeemed investments, ``saying they've had enough,'' he said.
Consumer-related shares had the biggest declines after the consumer-sentiment survey was released.
Wal-Mart slid US$1.33 to US$52.85. Procter & Gamble Co declined US$2.32 to US$83.63.
Home Depot sank US$2.31 to US$29.09, extending its loss this year to 43 percent. Peter Caruso, a Merrill Lynch & Co analyst, said the stock may fall because of sluggish sales, depleted inventories and the need for capital investment in stores. He cut his rating to "neutral" from "strong buy."
Rival Lowe's Cos dropped US$3.02 to US$40.18.
Regional phone companies fell after a JP Morgan Chase & Co analyst, Marc Crossman, said their profits will grow less than expected next year.
Verizon Communications Inc declined US$2.30 to US$35.30 and was the biggest drag on the S&P 500. SBC Communications Inc slid US$1.01 to $29.64, and BellSouth Corp dropped US$0.70 to US$31.25.
Duke Energy Corp, the second-largest utility owner, fell US$3.20 to US$24.75 after saying its energy-trading records have been subpoenaed.
Prosecutors and regulators are widening their probe of sham transactions in electricity and gas markets, having previously sought records from Dynegy Inc, Reliant Energy Inc.
and other trading companies.
Dynegy dropped US$0.21 to US$6.30, and Reliant slid US$0.85 to US$14.95.
Dell rose US$1.10 to US$25.03. The world's second-largest personal-computer maker said profit in the quarter ending Aug. 2 will be US$0.19 a share on sales of US$8.3 billion, compared with a May estimate of US$0.18 on sales of US$8.2 billion. It had a loss of US$0.04 on sales of US$7.6 billion in the year-ago second quarter.
Micron Technology Inc, a computer-memory chipmaker that supplies Dell, advanced US$1.04 to US$23.39.
General Electric Co rose US$1.25 to US$28.60 after saying second-quarter profit climbed to US$0.44 a share from US$0.39 a year earlier, matching estimates. The company stuck to its full-year growth forecast.
Juniper Networks Inc rose US$0.48 cents to US$7.70. The second-biggest maker of equipment to direct Internet traffic said it broke even on a per-share basis in the second quarter, excluding acquisition-related costs and a gain on deferred compensation. On that basis, analysts had forecast a loss of US$0.01.
Cisco Systems Inc, the top maker of networking gear, gained US$0.33 to US$14.38.
Conseco Inc plunged US$0.43, or 24 percent, to US$1.38.
AM Best cut its ratings on Conseco's insurance units. Weakness in the economy or the insurance business could threaten the company's turnaround efforts, the agency said.
The Russell 2000 Index of smaller stocks fell 3.40, or 0.8 percent, to 413.28. The Wilshire 5000 Total Market Index, the broadest measure of US shares, declined 48.51, or 0.6 percent, to 8,711.50. Based on changes in the Wilshire, the market value of US shares lost US$55.8 billion.
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