US stocks fall, Nasdaq closes at 5-year low
( 2002-07-02 10:32 ) (7 )

Wall Street began the third quarter on a dour note on Monday as the technology-laden Nasdaq Composite carved out its lowest close in five years as investors braced for the next big accounting blowup and fretted over Corporate America's soggy profit prospects.

The multibillion-dollar accounting scandal surrounding WorldCom Inc. continued to unfold, doing little to rebuild investor confidence rapidly eroded by a string of Wall Street scandals. WorldCom's shares lost 92.7 percent, or 77 cents, to end at 6 cents. An upbeat forecast from 3M Co., which rose $4.40 to $127.40, helped underpin blue-chip shares early on, but it was not enough to pierce the pervasive gloom hanging over the market.

"Investor psychology is just broken right now," said Michael Murphy, head of equity trading at Wachovia Securities. "There are lots of uncertainties out there ... People are just unsure."

The technology-laced Nasdaq Composite Index slumped 59.38 points, or 4.06 percent, to 1,403.83, according to the latest available data. The Nasdaq breached the 1,423.19 closing low set on Sept. 21 soon after the Sept. 11 attacks and was the lowest close since 1,401.69 on June 10, 1997.

The Dow Jones industrial average trimmed its early gain to slip 133.33 points, or 1.44 percent, to 9,109.93, while the broader Standard & Poor's 500 Index slumped 21.16 points, or 2.14 percent, to 968.65, just above its Sept. 21 closing low of 965.80.

More than 1.5 billion shares of WorldCom were traded, by far breaking the Nasdaq's record for most shares traded in an individual issue on a single day.