Stocks fell in New York yesterday even as a key interest rate fell toward another all-time low, failing to distract investors from nagging concerns about company profits.
The Dow Jones industrial average dropped 72.74 points - 0.91 per cent - to 7,906.25 after sliding to a loss of nearly 100 point late in the heavily traded session.
Broad-market indicators suffered sizeable losses, with banking and energy stocks the worst hit amid worries about weak earnings in those sectors.
Banking shares fell sharply following reports that Merrill Lynch had downgraded Citicorp, and trimmed its profit forecasts for Chase Manhattan, BankAmerica, and BankBoston. Similarly, the biggest fall on the Dow was J.P. Morgan, which erased Monday's big gain.
Bonds turned higher after slipping in the morning amid some profit-taking on Monday's rally. As bond prices rose, the yield on the 30-year Treasury - a key determinant of borrowing costs - fell as low as 5.70 per cent before settling near 5.72 per cent, slightly below Monday's all-time low of 5.73 per cent.
Declining issues outnumbered advancers by nearly a 2-to-1 margin on the New York Stock Exchange, with 1,035 up, 1,996 down and 444 unchanged.
NYSE volume totalled 617.60 million shares, down slightly from Monday's heavy tally of 626.27 million.
