Wall Street succumbed to more selling Monday, extending Friday's selloff in a volatile session that saw the Dow Jones industrials drop more than 300 points, rebound and then close down more than 230.
Analysts said the sharp swings reflected investors' uncertainty after nine weeks of declines, including Friday's 390-point plunge in the Dow. Mixed earnings reports affected specific stocks, but failed to give the market a lift.
"Emotions are running high right now, and a quick move to the downside can easily be replaced by a move to the upside and vice versa," said Charles G. Crane, strategist for Victory SBSF Capital Management. "People are shooting first and asking questions later."
The Dow closed down 234.68, or 2.9 percent, at 7,784.58, its third straight triple-digit finish and its lowest close since it reached 7,731.90 on Oct. 8, 1998. It was also the average's first close below 8,000 since Oct. 14, 1998, when it finished at 7,968.80.
The Dow has lost 624.91 points in the last two sessions.
Broader stock indicators also retreated. The Nasdaq composite index dropped 36.50, or 2.8 percent, at 1,282.65, and the broader Standard & Poor's 500 index slipped 27.91, or 3.3 percent, to 819.85.
The Nasdaq last closed lower on May 1, 1997, when it stood at 1,270.50. The last time the S&P closed lower was May 7, 1997, when it reached 815.62.
The volatility came a day after WorldCom filed for Chapter 11 bankruptcy protection, a move that was widely expected following the telecommunications company's disclosure nearly a month ago of deceptive accounting practices. The stock rose 5 cents to 14 cents after WorldCom's chief executive said he was optimistic the company would emerge from court protection within 12 months.
Although the WorldCom announcement was significant, analysts said it was not the primary driver behind Wall Street's retreat. Rather, they said, investors fed up with corporate ethics and accounting scandals are staying away from the market — or even pulling their money out and shifting into investments perceived as less risky, such as real estate or bonds.
Still, there were still some losses related to the news, particularly among WorldCom's creditors. J.P. Morgan Chase fell $1.58, or 6 percent, to $24.52, while Citigroup dropped $3.96, or 11 percent, to $32.04.
Citigroup was also hurt by reports that the National Association of Securities Dealers was preparing a case against its Salomon Smith Barney unit and research analyst Jack Grubman for alleged security rules violations. The Wall Street Journal first reported the expected charges against Grubman; they were confirmed for The Associated Press by a source familiar with the case who spoke on condition of anonymity.
Other stocks with steep declines included Microsoft, which tumbled $3.27, or 6.6 percent, to $46.29, and IBM, which fell $3.50, or 4.9 percent, to $68.50.
ExxonMobil slid $2.13, or 6.6 percent, to $30.27, while Williams Cos. fell 61 percent, down $3.15 to $2.01, on news the company expects a significant quarterly loss and planned to slash its dividend.
"The market is cautious, and very skeptical right now," said Subodh Kumar, chief investment strategist for CIBC World Markets. "People are focused on in their minds whether the earnings being reported or reliable or not. And when you hear things like big bankruptcies, people tend to get nervous."
The few companies that did manage sharp gains had upbeat news.
3M advanced 12 cents to $109 after increasing its earnings forecast for the second time this year, following the release of second-quarter earnings that more than doubled on higher sales and improved efficiency.
And Procter & Gamble advanced $3.37 to $77.83 after the personal care products company said it is stepping up its stock buyback program and remains confident about its business. UBS Warburg also upgraded the stock from "buy" to "strong buy."
Stocks have fallen steadily since May 17, the last time the three major indexes posted a weekly advance.
On Friday, the Dow suffered its seventh-largest point drop, falling 390.23, to 8,019.26, a loss of 4.6 percent.The Nasdaq fell by a smaller percentage, 2.8 percent, dropping 37.80 to 1,319.15, and the S&P 500 lost 33.80, or 3.8 percent, to 847.76.
Declining issues led advancers 4 to 1 on the New York Stock Exchange Monday. Consolidated volume came to almost 2.67 billion shares, compared with 3.14 billion Friday.
The Russell 2000 index fell 6.55, or 1.7 percent, to 379.65.
Overseas, Japan's Nikkei stock average fell 0.1 percent. In Europe, Germany's DAX index lost 5.2 percent, Britain's FTSE 100 slipped 5.0 percent, and France's CAC-40 dropped 5.3 percent.