Shares Fall on Earnings Warnings, War Concerns

Stocks slumped anew Wednesday amid fresh corporate earnings warnings and continuing war jitters.

Oil and gold prices rose again, and some investors sought safety in Treasury securities.

On Wall Street, earnings warnings from firms including Bank of New York and Blockbuster helped drive the Dow Jones industrial average down 88.04 points, or 1%, to 8,447.35. It was the index’s ninth loss in 13 sessions.

The Nasdaq composite index dropped 30.54 points, or 2.2%, to 1,361.51, and falling stocks outnumbered rising issues by about 2 to 1 on that market and on the New York Stock Exchange.

Bank of New York shares slid $4.11 to $22.39 after it said fourth-quarter earnings would be cut by higher-than-expected loan losses. Blockbuster plunged $6.27 to $13.13 after the company said movie rental sales have been disappointing.

Those announcements, as well as chip maker Micron Technology’s report of a wider-than-expected quarterly loss, may have caused more investors to rein in their expectations for profit growth in general in the near term.

“Fourth-quarter earnings expectations were too high, and 2003 earnings expectations were too high,” Michael Kenneally, chief investment officer at Banc of America Capital Management, told Bloomberg News. “They have to come back to earth.”

In recent days, the market also has been dogged by rising concerns about a potential U.S.-Iraq conflict. White House spokesman Ari Fleischer said Wednesday that there were serious omissions and problems with Iraq’s weapons declaration as President Bush pondered the administration’s next move.

Crude oil prices rose sharply on the war worries as well as civil strife in Venezuela, a major producer. Near-term oil futures in New York rose 34 cents to $30.44 a barrel after trading at an 11-week high of $31.25.

Rising fear levels pushed some investors into Treasury securities, driving yields lower. The 10-year T-note yield fell to 4.04% from 4.12% on Tuesday.

Gold also continued to gain as investors looked for a safe haven. January gold futures in New York surged $4.70 to $342.20 an ounce, a 5 1/2-year high.

Meanwhile, the dollar halted its recent slide against the euro, though it lost modest ground against other currencies, including the yen.

Among other highlights:

* Micron shares plummeted $3.06 to $10.22, dragging other chip stocks lower. Intel fell 76 cents to $17.13, National Semiconductor slid $1.35 to $15.75, and Broadcom was down $1.09 to $15.90.

But elsewhere in the tech sector, Oracle’s fiscal second-quarter profit, reported after regular trading ended, was better than expected. The stock fell 39 cents to $10.63 in regular trading, then rose to $11.35 after hours.

* Bank shares fell with Bank of New York. Northern Trust dropped $2.02 to $34.50, Bank One lost $1.40 to $36.17, and FleetBoston was down 97 cents to $24.94.

* Early today in Tokyo the Nikkei 225 index fell 1.1% to 8,256, below the 19-year closing low of 8,303 set Nov. 14.

Market Roundup, C5, C8