NEW YORK – Stocks sagged Thursday as an unnerving spread of anthrax cases kept up pressure on the market, although some encouraging quarterly reports helped lift tech stocks a touch higher.
The Dow Jones industrial average fell 69.40 points, or 0.75 percent, to end at 9,163.57, according to the latest data, while the Nasdaq composite rose 6.59 points, or 0.40 percent, to 1,652.93. The broad Standard & Poor's 500 index slipped 8.44 points, or 0.78 percent, to 1,068.65.
"There are still unfortunately a lot of unknowns," said Michelle Clayman, chief investment officer at New Amsterdam Partners, which oversees $1.3 billion. "We have this whole anthrax issue ... and we are coming into earnings season. Even though everybody has been talking about how weak earnings are, it's still a shock when the news rolls on the tape."
Decliners beat out gainers 2 to 1 on the New York Stock Exchange. Consolidated volume came to 1.52 billion shares, compared with 1.74 billion Wednesday.
This week marks the heart of the third-quarter earnings season, but gnawing fears over bioterrorism are sharing the spotlight with corporate scorecards. On Wednesday, anthrax anxiety tossed the market lower -- deflating an early rally sparked by positive earnings from computer giant International Business Machines Corp. and chip leader Intel Corp.
Investors are wary of stocks. Mutual fund holders yanked a record $32 billion out of stock funds in September, as the attacks on New York and Washington triggered a big market selloff, fund tracking company Lipper Inc. said.
In the third quarter, the blue-chip Dow lost almost 16 percent and suffered its worst performance since December 1987. The tech-rich Nasdaq tumbled more than 30 percent last quarter, its second-worst quarterly performance ever.
Stocks had crept higher in the past three weeks as investors clung to hopes that more government spending and lower interest rates will revive the economy and corporate profits. Some of that enthusiasm carried over to technology stocks on Thursday.
Microsoft Corp. rose 72 cents to $56.75 as investors bet on upbeat earnings from the software giant due after the bell. Microsoft after the close posted a lower quarterly profit, but said sales of its popular corporate software were strong.
McDonald's fell 16 cents to $29.24, weighing on the blue chip Dow index. The world's largest restaurant chain's profits slipped 1 percent, despite a recovery from the effects of mad cow disease that hit its European sales.
General Motors, also a Dow component, fell 75 cents to $42.02. The world's largest automaker reported a 54 percent drop in earnings, reflecting the sharp fall in U.S. car sales and the costs of cheap loans to customers.
Merck & Co. Inc., the world's No. 3 drugmaker, dropped $2.75 to $66.30. The company, which also is a Dow component, said profits rose 6 percent, but also cited sluggish sales of its blockbuster Vioxx arthritis drug.
Sprint Corp., the No. 3 U.S. long-distance telephone company, slumped $1.94 to $20.05. The company reported a loss and cut 6,000 jobs. Sprint's wireless arm Sprint PCS Group fell $2 to $24.45 and was the most active issue on the New York Stock Exchange. It said it added more subscribers than expected in the third quarter. The stock has outperformed the S&P 500 index over the past year.
Energy stocks fell in line with a drop of 3.5 percent in U.S. crude oil prices on speculation the Organization of Petroleum Exporting Countries will not act soon to halt a price slide due to soft demand. Dow issue ExxonMobil Corp. shed $1.04 to $40.40. The Philadelphia oil services index shed 3.51 percent.
The latest economic data continued to paint a bleak economic picture. Manufacturing activity in the mid-Atlantic decelerated at a faster pace in October, falling near lows hit early in the year, said a survey by the Federal Reserve Bank of Philadelphia that was conducted after the Sept. 11 attacks.
The Philadelphia Fed said its monthly business conditions index plunged to minus 27.4 in October from minus 7.3 in September, its 11th straight month of contraction. Economists had expected a reading of minus 15.3. A reading below zero indicates economic shrinkage -- not growth. The index hit a decade low of minus 36.8 in January.
The lines grew longer at U.S. state unemployment benefit offices last week, the government reported, as more workers are ending up jobless in an economy hit hard by the attacks. The Labor Department said the number of initial jobless claims increased by 6,000 to a seasonally adjusted 490,000 for the week ended Oct. 13, well above Wall Street's expectations.
The Russell 2000 index fell 3.43 to 421.06.
Overseas, Japan's Nikkei stock average dropped 2.6 percent. Stocks also fell in Europe. Germany's DAX index slipped 1.5 percent, while Britain's FT-SE 100 and France's CAC-40 each lost 1.7 percent.
Reuters and the Associated Press contributed to this report.