Stocks tumbled again under the burden of higher interest rates, but investors found an added impetus for a sell-off -- scattered warnings of weakness in second-quarter earnings.
The Dow Jones industrial average fell 132.03 to close at 10,534.83, the fourth straight decline for the blue-chip index. The Dow has now lost 320 points since Monday, nearly wiping out last week's 365-point gain.
Broader indicators also dropped. The Nasdaq composite index lost 44.13 to close at 2553.99, and the Standard & Poor's 500-stock index fell 17.28, to 1315.78.
Most analysts expect companies to report generally robust earnings after the second quarter ends next week. But amid concerns about the Federal Reserve's plans to raise interest rates to slow economic growth, some say the market has grown too fragile to withstand much bad news.
Semiconductor maker Advanced Micro Devices provided a solid dose late Wednesday when it said it expects a second-quarter loss far worse than analysts have anticipated. AMD said microprocessor prices have collapsed and the company has lost market share to industry leader Intel. Today, the company's stock fell 1 1/8 to close at 17-1/16.
Also late Wednesday, Micron Technology said it lost 10 cents a share in its fiscal third quarter. Analysts had expected the chipmaker to break even. Micron's stock fell 4-9/16, to 39 3/8.
The earnings weakness wasn't confined to technology companies. Goodyear, a component of the Dow, said today that its second-quarter profits will fall well below analysts' expectations. Its shares held up, however, slipping just 1/8, to 56 1/2.
The poor results and warnings helped deflate Wall Street's optimism that strong earnings could lure investors back into the market.
The investment firm Morgan Stanley Dean Witter beat Wall Street estimates in its earnings report today, due to big business in trading, selling and underwriting securities. The firm's stock followed a pattern set by rival brokerages this week, falling 1-15/16, to 91-5/16, as interest-rate concerns outweighed good earnings news.
The continuing slide of the bond market also pressured stocks. The yield on the 30-year Treasury bond rose as high as 6.17 percent, its highest level since November 1997, before settling at 6.16 percent in late trading, up from 6.14 percent late Wednesday. The benchmark bond's price fell $2.19 per $1,000 invested.
Analysts also said last week's sentiment that the Fed will raise rates only a quarter of a percentage point has given way to a belief that it might raise rates higher, or more than once.