Stocks fall after yielding early gains Economic slowdown stirs earnings worries


NEW YORK -- U.S. stocks fell yesterday for the third time this week as concern grew that the economy's slowdown will crimp earnings growth later this year.

An Atlanta Federal Reserve report showed cooler economic growth, driving investors from computer-related companies to companies whose profits are less dependent on the economy's health. The latest winter storm to hit the Northeast, home to about one-third of the nation's economy, compounded earnings concerns.

The Dow Jones industrial average fell 3.98, to end the week at 5061.12. The average gave up all of a 24.92-point advance, and dropped 121.03, or 2.33 percent, during the week.

In the broader market, the Standard & Poor's 500 index dropped 0.88 to 601.81, reversing a gain of as much as 2.11.

Declining stocks outpaced advancing issues on the New York Stock Exchange by fewer than 12 to 11. Volume dropped to 376.7 million shares from 407.6 million Thursday.

The Nasdaq composite index declined 2.87 to 1,008.23, after falling as much as 7.94. The Russell 2,000 Index of small-company shares dropped 0.58 to 305.14; the Wilshire 5,000 index slipped 6.31 to 5,897.51; and the AMEX market value index dipped 2.46 to 534.64.

Computer and semiconductor stocks slid as three brokerage firms lowered earnings estimates for Dell Computer. The firms cited concern about delayed sales to the government caused by the past two months' partial shutdowns, and smaller profit margins.

Dell Computer tumbled $4.875 to $28.625. Apple Computer fell $1.375 to $33.625. Motorola Inc., a bellwether maker of semiconductors and cellular telephones, eased 62.5 cents to $49.50.

NetManage Inc., the most active stock in the United States with 11.7 million shares changing hands, slumped $3.6875 to $10.875. The network software company warned that it will report fourth-quarter earnings below last year's because of delayed orders.

Among makers of computer chips, International Rectifier Corp. slid $2.75 to $21.125, and Micron Technology Inc. fell $2.875 to $33. Micron, with 10.6 million shares traded, was the second most active stock.

Retail companies dropped because of concern that this winter's storms will extend a weak holiday selling season. Wal-Mart Stores Inc. fell 62 1/2 cents to $22.25; Kmart Corp. fell 62 1/2 cents to $7.125; and Circuit City Stores Inc. declined 87 1/2 cents to $26.

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