NEW YORK -- A reeling International Business Machines Corp. slammed into the market, pushing U.S. stocks lower for a fifth straight session.
"The entire stock market was tainted by IBM's decision to take a $6 billion restructuring charge," said Barry Berman, head trader at Robert W. Baird & Co.
"IBM is a big company that's widely held and it has a profound effect on the market," he said.
The Dow Jones industrial average slid 7.84 to 3284.36, as gains in Minnesota Mining & Manufacturing Co., Coca-Cola Co., General Electric Co. and Exxon Corp. partially offset IBM's slump.
The drop in the NASDAQ Combined Composite index was more severe. The NASDAQ composite fell 3.98 to 650.75, or about 0.61 percent. The slide was led by four computer companies, Microsoft Corp., Novell Inc., Apple Computer Corp. and Seagate Technology Inc. The NASDAQ composite is down about 2.4 percent in the past five sessions.
"Everything on the over-the-counter market is getting socked," said James Andrews, first vice president in charge of institutional trading at Janney Montgomery Scott Inc.
Standard & Poor's 500 index fell 0.27 to 432.57. Declining common stocks outnumbered advancing issues by 4 to 3 on the New York Stock Exchange. Trading was active, with about 228 million shares changing hands on the Big Board. The American Stock Exchange Market Value index declined 1.90 to 390.66.
IBM plunged to a 10-year low of $56 before closing the day at $56.125, down $6.75. The company said it would take a $6 billion charge against fourth-quarter earnings to consolidate plants and cut as many as 25,000 more jobs. The world's largest computer company also said for the first time that it might cut its dividend. IBM has paid an annual dividend of $4.84 a share since early 1989.
"We've had restructurings galore from IBM over the years," said David Wu, an analyst at S. G. Warburg & Co. "Until we see any signs of improvement, I'm from Missouri."
IBM was the most actively traded stock on the U.S. Composite, followed by Topps Co., Purolator Products Co., Snapple Holding Corp. and Tucson Electric Power Co.
Topps fell $2.875 to $12.125 in NASDAQ trading after reporting third-quarter earnings of $11.4 million, or 24 cents a share, down from $14.1 million, or 30 cents a share, last year. Earnings were well below investors' expectations.
Purolator Products, an initial public offering, closed at $15. The company sold 10 million shares at $15 each through Lehman Brothers. Purolator, based in Tulsa, Okla., makes filters used primarily in automobiles.
Snapple, best known for its ready-to-drink iced tea, went public yesterday at $20 a share. The first trade on the NASDAQ market was completed at $31. Snapple shares closed at $29.50 in NASDAQ trading, up 47.5 percent from the IPO price.