NEW YORK – Stocks fell Tuesday as a widening anthrax scare in the United States and more disappointing corporate results offset hopes of a quick economic rebound.
"There's a real lingering fear that as the anthrax issue widens, it strikes not only at the physical well-being of people, but of the well-being of the economy," said Peter Coolidge, senior equity trader at Brean Murray & Co.
Stocks slumped on news that a New Jersey postal worker is suspected of having the inhaled form of the disease. Also, the Washington D.C. mayor confirmed the bacteria killed two Washington postal workers.
The Dow Jones industrial average fell 36.95 points, or 0.39 percent, to end at 9,340.08, while the technology-packed Nasdaq Composite Index, which held positive ground for much of the day, slipped 3.69 points, or 0.22 percent, to 1,704.39. The broader Standard & Poor's 500 Index lost 5.12 points, or 0.47 percent, at 1,084.78.
Volume was active. About 1.3 billion shares changed hands on the New York Stock Exchange, with declining stocks in line with advancing stocks. On the Nasdaq, 1.8 billion shares traded and 19 fell for every 16 that rose.
Stocks have been higher over the last few sessions, as investors looked beyond the flood of quarterly earnings and bet that a rebound, while still months off, is on its way.
"We can't really point to these earnings and say fundamentals have improved,'' said Charles Payne, market analyst at Wall Street Strategies. ``But the bar has been lowered enough that most companies have either come in line or actually beat estimates and that's good news.''
Quarterly results poured in from Corporate America in one of the busiest weeks of the earnings reporting season, with companies like Exxon Mobil Corp., the No. 1 U.S. oil company, and telecommunications gear maker Lucent Technologies Inc. in the spotlight.
Lucent posted a bigger-than-expected loss and took an $8 billion restructuring charge amid the slowdown in the telecom industry. Lucent fell 25 cents to $6.65.
Exxon Mobil, the world's largest publicly-traded oil company, said its earnings fell nearly 23 percent as crude oil prices dropped. Exxon fell 25 cents to $40.87.
SBC weighed on the Dow average for the second day, racking up the biggest percentage loss among blue chips. SBC fell $2.62 to $38.78 after investment banks, including Goldman Sachs, cut their ratings on the company's stock on fears revenues could fall further.
SBC on Monday posted a 31 percent drop in earnings and will cut thousands of jobs because of the weak economy and stiff competition.
Pharmacia tumbled $4.37 to $38.39 after lowering its profit forecast for next year, which some analysts tied to slowing sales growth for its arthritis drug Celebrex.
Lucent Technologies Inc. was the second-most active NYSE stock after the telecommunications gear maker posted a bigger-than-expected loss and took an $8 billion restructuring charge amid the slowdown in the telecom industry. Lucent fell 26 cents to $6.64.
Principal Financial was the most active stock on the NYSE as it made its Wall Street debut, leaping 13.5 percent to $21, as investors cast aside worries about slumping stocks and bought heavily into the first $1 billion-plus stock offering in more than three months.
Railroad stocks helped underpin the broader market, however, after railway operator CSX Corp. reported a 69 percent jump in earnings on cost cuts and increased rates, and forecast fourth-quarter earnings would be ``significantly'' higher than last year's. CSX gained $2.45 to $35.19, while Union Pacific Corp. gained $1.85 to $51.03.
The past two weeks mark the busiest stretch of the third-quarter earnings reporting season. So far, more than half of the companies in the S&P 500 have reported, and out of those, 54 percent have beat forecasts, while another 32 percent matched estimates, according to Thomson Financial/First Call.
While analysts are forecasting the worst quarterly earnings in a decade, investors say dismal profits are already anticipated by Wall Street as major market indexes have tumbled between 13 and 30 percent so far this year.
And analysts say they expect the Federal Reserve's nine interest-rate cuts this year, and a $100 billion economic stimulus package making its way through Congress, will help the economy and Corporate America snap back, at least by the middle of next year.
The Russell 2000 index, the barometer of smaller company stocks, fell 0.79 to 429.71.
Stocks traded sharply higher overseas Tuesday. Japan's Nikkei stock average ended the day up 2.8 percent. Britain's FT-SE 100 closed up 2.4 percent, France's CAC-40 climbed 2.6 percent, and Germany's DAX index gained 1.7 percent.
Reuters and the Associated Press contributed to this report.
Get all the stories you need-to-know from the most powerful name in news delivered first thing every morning to your inbox