Dow Drops 234 to Close Below 8,000

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Last updated at: (Beijing Time) Tuesday, July 23, 2002

Dow Drops 234 to Close Below 8,000

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.

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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.

The Dow closed down 234.82, or 2.9%, at 7784.44, according to preliminary calculations, its third straight triple-digit finish and its lowest close since it reached 7731.90 on Oct. 8, 1998. It was also the average's first close below 8,000 since Oct. 14, 1998, when it finished at 7968.80. The Dow has lost 625.05 points in the last two

sessions.

The Nasdaq composite index was down 36.60, or 2.8%, at 1282.55, and the broader Standard & Poor's 500 index was off 27.92, or 3.3%, at 819.83. The Nasdaq last closed lower on May 1, 1997 when it was at 1270.50. The last time the S&P closed lower was May 7, 1997 when it stood at 815.62.

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.

The volatility came a day after WorldCom filed for Chapter 11 bankruptcy protection, a move that had been 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 for 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.

Source: Agencies

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