Dow tumbles below 10,000

Stocks tumbled Monday as crude futures set a new record at nearly $50 a barrel and bearish broker calls on chip and communications equipment shares added to pressure on technology issues.

The Dow Jones Industrial Average [$INDU] slumped 58.70 points, or 0.6 percent, to close at 9,988.54, ending below the 10,000 mark for the first time since Aug. 17.

The Nasdaq Composite Index [$COMPQ] fell 19.60 points, or 1 percent, at 1,859.88 while the S&P 500 [$SPX] dropped 6.59 points, or 0.6 percent, to 1,103.52.

Decliners outnumbered advancers by a 21-12 margin on the New York Stock Exchange and by 11-4 on the Nasdaq. Big Board volume was about 1.26 billion shares, while some 1.31 billion shares traded on the Nasdaq.

"We seem to be recoupled to oil again today," said Stephen Sachs, head of Trading at Rydex Investments. "If oil hangs around $49 or $50 for very long I think it could get ugly pretty quickly."

Besides the concerns over crude, markets are facing "a lot of random noise" as the third quarter winds down this week, said Michael Metz, chief investment strategist at Oppenheimer & Co. "A lot of portfolio managers are biting the bullet and selling their losers, and I think they're preferring to go into cash rather than committing themselves elsewhere," he said.

Phil Dow, director of equity strategy at RBC Dain Rauscher, said, "My guess is that the week is going to be one where you don't expect a whole lot and probably don't get a whole lot. I think the key here is holding on for the next major catalyst," said Dow, who expects the market will do better later this year and into 2005.

Source: Agencies