The Dow Jones industrial average closed below 10,000 yesterday, the low point so far in a summer slump driven by disappointment over corporate earnings, signs the economy may be slowing and the political uncertainty of a presidential election year.

"Psychology drives the stock market, and we are undoubtedly in a period where psychology is negative," said Andrew M. Brooks, head of equity trading at T. Rowe Price Associates Inc. "The market's just in a funk."

Yesterday, the Dow fell 88.11 points, or 0.9 percent, to close at 9962.22, the first time it has closed under 10,000 since May 24. The Standard & Poor's 500-stock index dropped 10.64 points, or 1 percent, to 1086.20. And the technology-heavy Nasdaq composite index was off still more, falling 39.97 points, or 2.1 percent, to 1849.09, its lowest level since October.

The market has moved steadily down in recent weeks, enough to chip away slowly at the value of Americans' 401(k)s and traders' nerves. In the past month, the Dow is off 4.9 percent, and the broad-based S&P 500, which has declined for six straight weeks, is down 2.3 percent for the year, slightly cutting into its huge gains of 2003.

Despite the downward trend, traders and market analysts describe more a general malaise in the market than outright bearishness.

The most significant force pushing stocks downward, analysts said, is worry that the extraordinary profit growth major companies have experienced in the past year cannot be repeated in the second half of the year. Based on actual earnings reports and estimates, Thomson Financial projects that second-quarter earnings for companies in the S&P 500 rose 23.8 percent, compared with the 14.9 percent growth analysts predict for the third quarter.

The problem is not that companies are logging weak results but that the market's expectations have been even higher. Corporate earnings were "good, but just not good enough," said Jeffrey Swensen, head trader with Batterymarch Financial Management Inc.

There is evidence from June economic data that the economy is continuing to grow but at a slower pace than in the first half of the year. In June, retail sales were lower, industrial production dropped, and fewer jobs were added than in the preceding months.

"The economy is likely cooling down a bit, but it's been too hot not to cool down," said Stuart Schweitzer, global markets strategist at J.P. Morgan Chase & Co., "And cooling down doesn't mean stalling out."

Yesterday, the market decline was driven by news about earnings and expectations from Microsoft Corp. and Coca-Cola Co. Microsoft, which reported results after the market closed Thursday, met analysts' expectations for earnings in the three months ended in June. But it said that for the fiscal year ending next June, it expects profit of $1.05 to $1.08 per share, not the $1.16 to $1.18 it had previously forecast. Coca-Cola Co. reported sales of $5.97 billion, compared with the $6.13 billion analysts expected.

Microsoft said it anticipated less interest income as it begins paying higher dividends to investors.

Investors have backed away from technology stocks, with the S&P Information Technology Consulting and Services Index falling 26 percent in the past three months, more than any other sector index. Stocks of semiconductor equipment and electronics manufacturers have fallen by double-digit percentages. Tech stalwarts eBay Inc., Amazon.com Inc. and Motorola Inc. all reported disappointing second-quarter numbers recently.

Lower-than-anticipated corporate spending on new technology has hurt the sector -- which had large gains in 2003, analysts said. Tech companies "aren't seeing orders coming in as strong as they were earlier this year, and guidance has been downward as a result," said David Wyss, chief economist at Standard & Poor's.

The presidential campaign has given wary investors one more reason to stay out of the market. Market analysts can argue that either a Kerry administration or second term for George W. Bush would be better for stocks, but many say that the uncertainty of what will happen works against the market.

Adding to the nervousness is the risk of terrorist attack or other disruption at the Democratic National Convention this week, and at the Olympics and Republican National Convention after that. "People feel like, why put money in the market with all this stuff coming up where something bad could happen?" said Todd Leone, head of listed trading at S.G. Cowen & Co.

Meanwhile, the Federal Reserve has made clear its intention to keep raising interest rates, if gradually, through the year, a process that started with a quarter-point hike of the federal funds rate at the June meeting of the Federal Open Market Committee. Higher interest rates tend to hurt stocks by making it more expensive for companies to borrow money that lets them expand.

"Eventually the right catalyst will bring money back into the market and move everything along," said Arthur Hogan, chief market analyst at Jefferies & Co. "The waiting has everybody frustrated."

Other Indicators

* The New York Stock Exchange composite index fell 66.53, to 6324.10; the American Stock Exchange index fell 10.84, to 1233.47; and the Russell 2000 index of smaller-company stocks fell 7.29, to 539.23.

* Declining issues outnumbered advancing ones by 2 to 1 on the NYSE, where trading volume fell to 1.34 billion shares, from 1.67 billion on Thursday. On the Nasdaq Stock Market, decliners outnumbered advancers by 8 to 3 and volume totaled 1.69 billion, down from 1.92 billion.

* The price of the Treasury's 10-year note rose $1.56 per $1,000 invested, and its yield fell to 4.43 percent, from 4.45 percent on Thursday.

* The dollar rose against the Japanese yen and the euro. In late New York trading, a dollar bought 110.09 yen, up from 109.76 late Thursday, and a euro bought $1.2104, down from $1.2250.

* Light, sweet crude oil for September delivery settled at $41.71, up 35 cents, on the New York Mercantile Exchange.

* Gold for current delivery fell to $390.50 a troy ounce, from $395.20 on Thursday, on the New York Mercantile Exchange's Commodity Exchange.

Traders work at the New York Stock Exchange, as earnings reports from Microsoft and Coca-Cola and decreased tech spending helped push stocks lower.