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Associated Press

NEW YORK - Signs of a slowing economy dragged down the stock market Wednesday. Even the prospect of continued stimulus from the Federal Reserve didn't help.

Major market indexes fell by 0.9 percent, their worst decline in two weeks. Small-company stocks fell even more, 2.5 percent, as investors shunned risk.

Stocks opened lower and kept sagging throughout the day, hurt by reports of a slowdown in hiring and manufacturing last month. Discouraging earnings news from major U.S. companies also dragged the market lower.

"Investors are going to be rattled by these numbers," said Colleen Supran, a principal at San Francisco based-Bingham, Osborn & Scarborough. She expects stock market swings to increase after the early gains of the year.

The Dow Jones Industrial Average closed down 138.85 points to 14,700.95. Merck, the giant drug company, had one of the biggest falls in the Dow after reporting earnings that disappointed investors.

The Standard & Poor's 500 index, a broader market measure, dropped 14.87 points to 1,582.70. The Nasdaq composite index dropped 29.66 points, or 0.8 percent, to 3,299.13.

About two-thirds of companies in the S&P 500 have announced earnings for the first quarter. The earnings are at record levels, and about seven of 10 companies have topped the forecasts of Wall Street analysts, according to S&P Capital IQ.

The Russell 2000 index, a gauge of small-company stocks, fell 23.25 points to 924.21. Small stocks are generally seen as riskier investments because the companies are less established, have fewer resources and are more prone to failure.