NEW YORK – Stocks tumbled again Thursday and the blue-chip Dow Jones industrial average slumped below the psychologically key 10,000 mark for the first time since April as Wall Street was hit by a fresh barrage of gloomy corporate forecasts.
The Dow plunged 171.32 points, or 1.70 percent, to 9,919.58. The technology-heavy Nasdaq Composite Index index dropped 51.50 points, or 2.79 percent, to 1,791.67, a level unseen since April 9. The broader Standard & Poor's 500 Index fell 19.53 points, or 1.70 percent, to 1,129.03, also the lowest finish since April 9.
All three indexes are now well below where they started the year, although not at their 2001 lows. The Dow is down 8 percent and the Nasdaq off more than 27 percent, while the S&P has lost more than 14 percent.
Discouraging economic data also helped depress the market. The Commerce Department said consumer spending rose just 0.1 percent during July, an unexpectedly weak showing given that Americans began receiving tax rebate checks last month. That followed the government's report Wednesday that the gross domestic product rose at an annual rate of only 0.2 percent during the second quarter - its worst showing in eight years.
"Things get gloomier and gloomier, and today you can point the finger at Sun Microsystems and Corning," said Hugh Johnson, chief investment officer at First Albany Corp.
Sun Microsystems said late Wednesday it stands to lose money this quarter after Japanese and European sales failed to meet expectations amid sluggish economic growth. Sun -- the most heavily traded on Nasdaq -- fell $2.26 to $11.07. Earlier, the shares fell to $10.40, the lowest since late December, 1998.
Corning, the world's top fiber-optic cable maker, is cutting 1,000 jobs from its fiber unit, and plans short-term shutdowns at two North Carolina facilities due to slack demand for optical fiber and cable. Corning fell $2.55 to $12.05.
The company also said overall market growth for optical fiber in 2001 will be significantly less than its prior forecast for a 15 percent rise.
The Dow was also weighed down by losses in General Motors, which fell $1.64 to $54.21, and American Express, off $1.05 at $35.95.
Software giant Microsoft Corp was under the microscope again after the European Commission said it has expanded its investigation to look into whether the U.S. software giant is illegally tying its Media Player to its Windows operating system. Microsoft fell $3.31 to $56.94.
More bad news came from the world's top personal computer maker, Dell Computer Corp., after a senior executive said the company expects technology spending cutbacks in the Asia-Pacific region to continue and remains cautious on PC demand in months ahead. Its stock fell 1.69 to $20.11.
Altera Corp., which makes microchips that can be programmed by customers for a variety of purposes, said it expects third-quarter revenues to decline by 15 percent to 20 percent, consistent with expectations given in July.
The declines were the latest selling in a market that has struggled to rally sustainably since spring. The major stock indexes did manage some strong gains coming into the summer, but a gradual selloff that accelerated this month has wiped out much of those gains.
Analysts blame the market's dismal performance on investors' growing doubts about when a business recovery will finally occur. With corporate earnings and forecasts continuing to be weak and mixed economic data, stock prices are likely to remain low for a while -- giving investors little reason to buy.
The Russell 2000 index fell 5.28 to 468.06.
In overseas markets, Tokyo stocks dropped for a third straight day to their lowest levels in 17 years, hit by nagging fears about high-tech earnings and disappointment over a slow solution to the problem of bad loans at Japan's banks.
The benchmark Nikkei average fell 0.38 percent to 10,938.45, it's lowest close since October 19, 1984.
European stocks were dragged lower by the tech sector, yo-yoing after the ECB trimmed rates and indicated it might reduce them again this year in response to slowing inflation and weakening growth. Germany's DAX index slipped 2.7 percent, Britain's FT-SE 100 lost 1.6 percent, and France's CAC-40 dropped 2.7 percent.
Reuters and the Associated Press contributed to this report.