Wall Street: Thursday close
WALL Street struggled to hold a key psychological level after a blunt confession from a conglomerate that numbers former Tory Party treasurer Lord Ashcroft among its directors.
Tyco International's downbeat announcement before markets opened helped weigh on sentiment still vulnerable to negative surprises in the wake of Enron's collapse.
The Dow Jones Industrial Average traded below 10,000 for the first time since late February before ending the day up 4.63 points at 10,035.06. The Nasdaq Index, which started the day at its lowest level since October, inched higher by 0.36 points to 1,713.70.
Markets had been on the defensive on Wednesday on data suggesting that the US economy's recovery might be faltering.
Tyco, which makes everything from fire-fighting equipment to undersea cables, apologised to its shareholders in calling its 22 January announcement to split the company into four 'a mistake'. Dennis Kiozlowski, the company's chief executive, said: 'I take full responsibility and am aware that Tyco's management has let you down.'
Kozlowski, who rose to become one of America's top-paid executives in trying to emulate General Electric chief Jack Welch in building a multi-national conglomerate, also lowered Tyco's profit forecasts for the remainder of the year and said he would be forced to cut 7,100 jobs.
The announcement sent Tyco shares tumbling $5.15 or 20% to $20.75, down from $60 in January. The price drop is a blow to Ashcroft, who is one of Tyco's biggest stakeholders with nearly 6m shares, according to Securities and Exchange Commission documents.
Tyco was but one of several disasters of the day. Enron rival Dynergy plummeted $8.09 or 30% to $19.21 after it said that the Securities and Exchange Commission had launched an informal inquiry into the way it accounted for certain gas contracts.
Tech firm Network Associates dropped $4.86 or 20% to $18.89 as it confirmed that it was investigating 'accounting inaccuracies.' AOL Time Warner, which reported a $54bn. write-down after the close of trading on Wednesday, recovered 19 cents or 1% to $19.49 apparently on hopes that the worst might be over.
Cereal maker General Mills was knocked down $3.77 or 7.7% to $45.30 after it cancelled an analysts' meeting and declined to explain why. Analysts said they feared the company was about to warn that its profits might come in lighter than expected.
Telephone company WorldCom, which has been battered this week after it served up more bad news, recovered five cents or 1.4% to $3.53 in a mixed telecom sector. AT&T eased 26 cents or 1.9% to $13.49. Long-distance provider Sprint was up 32 cents or 1.9% to $16.92.
Financial shares were generally lower as investigators widened their investigation into initial public offerings and analyst recommendations during the internet boom.
Merrill Lynch stumbled $2.15 or 4.8% to $42.50. JP Morgan Chase lost 86 cents or 2.4% to $35.03.
Microsoft stood out among techs with a gain of 71 cents or 1.3% to $53.73. The shares have been pressured this week by publicity surrounding the testimony of chairman Bill Gates in a Washington court case considering ways to lessen the company's dominance in software. Intel gained 18 cents or 0.6% to $29.09.
Among Dow components, Walt Disney added 48 cents or 2% to $25 as it reported a 2% sales decline in the past three months, Alcoa was fractionally lower at $34.92 and Wal-Mart was marked down 45 cents or 0.8% to $57.
