Stocks Tumble As Investors Lose Confidence

A profit warning from Intel pushed the stock market into its worst slide since early January, prompting investors to second-guess the renewed confidence behind Wall Street’s record-setting rally.

The Dow Jones industrial average slid as much as 133 points Thursday before finishing down 94.91, or 1.1 percent, at 8,444.33. The technology-laden Nasdaq composite index tumbled 47.78, or 2.7 percent, to 1,711.92, its third-biggest one-day point drop.

It was the steepest decline since Jan. 9, when the Dow plunged 220 points amid heightened jitters over the economic crisis in Asia.

“We could probably make too much of this,” said Peter Canelo, U.S. investment strategist at Morgan Stanley Dean Witter. “We just had a 1,000-point rally (by the Dow) since Jan. 9 - technology was the leader - so we’re probably due for a little profit-taking anyway.”

Technology shares, pummeled repeatedly since late October amid concerns over their heavy exposure to the economic crisis in Asia, were among the biggest gainers in last month’s rally.

Intel plunged 10-13/16, or 12.5 percent, to 75-5/8 as the most active Nasdaq issue Thursday.

Declining issues outnumbered advancers by more than a 2-to-1 margin on both the NYSE and the Nasdaq Stock Market. NYSE volume totaled about 647.62 million shares at the 4 p.m. close, slightly higher than Wednesday.

Some of the stocks that moved substantially or traded heavily Thursday:

NYSE

Kmart, up 13/16 at 15-1/2.

The retailer, which on Wednesday posted better-than-expected results for its latest quarter, reported a 5.6 percent improvement in February sales from stores open at least a year.

Computer Sciences, down 11 at 94.

Computer Associates International, up 1-3/8 at 48-15/16.

Hostile bidder Computer Associates said it will let its $9.2 billion offer for Computer Sciences expire on March 16. On Monday, Computer Sciences formally rejected the $108-a-share bid.

NASDAQ

Intel, down 10-1/16 at 75-5/8.

Microsoft, down 2-1/4 at 80-1/16.

Dell Computer, down 7-3/16 at 131-7/8.

Intel warned late Wednesday that its firstquarter profits and revenues would fall below expectations because of sluggish orders for its semiconductors, prompting fears of slack demand in the computer industry. Intel had earlier predicted a slight improvement over year-earlier levels.

Unico American, up 2-1/2 at 17-1/2.

The insurance holding company announced that it is in discussions with an unidentified company about a potential merger. Unico American said Wednesday the discussions are at a “preliminary stage.”