The Standard & Poor's 500-stock index closed at its lowest point in almost four months after Agilent Technologies said its quarterly loss was wider than forecast.
Concern that U.S. disputes with Iraq and North Korea will weigh on the economy and corporate profits also contributed to the decline.
Blue-chip indexes dropped for a third day. The Dow Jones industrial average fell 55.88, or 0.7 percent, to 7929.30. The S&P 500 fell 5.44, or 0.6 percent, to 838.15, its lowest close since Oct. 11.
The Nasdaq composite index rose 0.23, to 1301.73. USA Interactive led the gain after the e-commerce company run by Barry Diller posted a quarterly profit.
Agilent, a maker of equipment used to test computer chips and analyze chemicals, tumbled $4.06, or 25 percent, to $12.26. The company said its loss was probably 22 cents to 28 cents per share before some costs in the companies fiscal 2003 first quarter, ended Jan. 31. In November, Agilent predicted a loss of 5 cents to 15 cents.
Insurance stocks fell after UnumProvident said the Securities and Exchange Commission is reviewing the way it values below-investment-grade assets. UnumProvident, the largest U.S. disability insurer, slipped $2.58, to $14.45.
USA Interactive rose $1.87, to $23.21. The company earned $148.1 million in the fourth quarter as more consumers used its Expedia and Hotels.com Internet site to book airline flights and hotel rooms. The company lost $56.9 million in the same quarter a year ago. Expedia climbed $4.31, to $63.36; Hotels.com rose 29 cents, to $43.31.
Sears, Roebuck, the largest U.S. department-store chain, dropped $2.23, to $23.31. The company said first-quarter earnings would miss analysts' estimates, because sales fell and its credit-card business was less profitable.
Michaels Stores fell $7.08, to $25.76. The world's biggest arts-and-crafts retailer said it will earn $2.05 to $2.10 a share this year. Analysts polled by Thomson First Call had expected $2.11.
Gap, the biggest U.S. clothing retailer, rose 55 cents, to $15.53. Sales at stores opened at least a year jumped 16 percent in January, the company said.
Ericsson's U.S. shares rose 51 cents, to $7.23. The mobile-phone firm named Carl-Henric Svanberg CEO, replacing Kurt Hellstroem after seven straight quarterly losses.
* The New York Stock Exchange composite index fell 50.56, to 4757.30; the American Stock Exchange index fell 4.16, to 816.69; and the Russell 2000 index of smaller-company stocks fell 2.26, to 364.73.
* Declining issues outnumbered advancing ones by a ratio of 16 to 9 on the NYSE, where trading volume fell to 1.39 billion shares, from 1.41 billion on Wednesday. On the Nasdaq Stock Market, declining issues outnumbered advancing ones by a ratio of 13 to 9 and trading volume totaled 1.2 billion, down from 1.33 billion.
* The price of the Treasury's 10-year note rose $4.38 per $1,000 invested, and its yield fell to 3.95 percent, from 3.99 percent on Wednesday.
* The dollar fell against the Japanese yen and the euro. In late New York trading, a dollar bought 119.88 yen, down from 119.93 late Wednesday, and a euro bought $1.0833, up from $1.0803.
* Light, sweet crude oil for March delivery settled at $34.16 a barrel, up 23 cents, on the New York Mercantile Exchange.
* Gold for current delivery fell to $370.10 a troy ounce, from $376.40 on Wednesday, on the Commodity Exchange division of the New York Mercantile Exchange.