NEW YORK (Reuters) - Stocks fell for the fourth straight session on Wednesday as Wall Street struggled with fears of rising bankruptcies and the accuracy of corporate bookkeeping.
``The monsters have been earnings disappointments, terrorists, now accounting,'' said Scott Vergin, a fund manager for the Lutheran Brotherhood, a money management firm in Minneapolis. ``In this environment, it's easy to lose ground and hard to make it up so you try and prevent disasters'' by being cautious.
Even an upbeat profit outlook from networking giant Cisco Systems Inc. (NasdaqNM:CSCO - news) and Tyco International Ltd's (NYSE:TYC - news) insistence it isn't facing a cash crunch couldn't buoy the market. Cisco after the close reported quarterly profits fell by more than half but still topped expectations, signaling corporate spending on technology may be turning around.
Long-distance telephone company Worldcom Inc. (NasdaqNM:WCOM - news) and other telecom stocks again slid. Worldcom has lost more than half its value this year as the beleaguered telecommunications sector has faltered under high debt levels and on fears about its quarterly earnings, expected on Thursday.
The broader Standard & Poor's 500 Index (.SPX) lost 6.52 points, or 0.6 percent, to 1,083.50 -- its lowest close since Oct. 31. The technology-laced Nasdaq Composite Index (.IXIC) dropped 25.44 points, or 1.38 percent, to 1,813.08. That's its lowest close since Nov. 5.
The Dow Jones industrial average (.DJI) was down 29.97 points, or 0.31 percent, at 9,655.46, its lowest close since Jan. 29.
Almost two stocks fell for every one that rose on the Nasdaq Stock Market, while decliners trounced advancers by a ratio of 19 to 11 on the Big Board.
``There are worries about something lurking in the bushes and you don't want to be a hero here,'' said Robert Streed, manager of the $400 million Northern Select Equity Fund. ``The market should have gotten at least a bounce after Cisco. Even if I can't see anything on the radar screen, I'm going to wait (to buy stocks) until I feel more confident.''
Earlier on Wednesday Cisco said it would exceed consensus earnings and sales estimates. That raised hopes sluggish corporate earnings are turning the corner and sent Cisco shares higher.
The computer networking firm, the second most-active stock on the Nasdaq, rose 11 cents to $18.61, but was well off a high of $19.25.
``Cisco was good news this morning and that gave us a lift but we ran out of gas,'' said Robert Basel, head of listed trading at Salomon Smith Barney. ``There is still a lot of fear about what could happen vis-a-vis the word 'accounting.'''
In the wake of the Enron Corp. collapse, investors are increasingly wary of minority investments in other companies, a practice that contributed to Enron's financial woes.
Conglomerate Tyco International Ltd. (NYSE:TYC - news) rose $2.82 to $25.92 and was the most active issue on the Big Board for the eighth-straight session. The company, caught recently in the sell-off related to accounting concerns, reassured investors it had no cash crunch or debts linked directly to its fallen share price, and stood by its accounting, calling it ``sound and appropriate.''
At the same time, Tyco warned it could miss its full-year earnings target because of higher borrowing costs, continued weakness in its electronics business and from the rumors and accounting worries that have clobbered the stock this year.
VeriSign Inc. (NasdaqNM:VRSN - news) was the latest company to be slammed by accounting fears. The computer security and Web address provider dropped $2.52 to $23.93 amid investor concerns about possible accounting issues related to minority investments, analysts said.
WorldCom has been the most-active company stock traded on Nasdaq for the past seven sessions, with more than 169 million shares traded on Wednesday. Shares dropped 28 cents to $6.69.
Bankruptcies in the telecom industry and downbeat results or outlooks from rivals AT&T (NYSE:T - news) and Sprint Group (NYSE:FON - news) also have hurt WorldCom shares.
``Many stocks are caught up in a cloud of uncertainty that is impacting them day after day,'' said Alan Ackerman of brokerage Fahnestock & Co.
AT&T shares lost 67 cents to $15.60, while Sprint dropped $1.19 to $12.64.
Quarterly earnings reports didn't bring much good news. General Mills Inc. (NYSE:GIS - news) sank $5.16 to $43.55 after the company, whose products include Cheerios cereal and Progresso soup, warned earnings would be lower than expected because sales operations were disrupted as a result of its acquisition of Pillsbury.
PepsiCo Inc. (NYSE:PEP - news) slumped $1.71 to $49.10. The soft-drink and snack-food giant reported a 16 percent rise in quarterly profits, but shares fell on worries archrival Coca-Cola Co. (NYSE:KO - news) is muscling in on the company's popular Gatorade sports drink brand after PepsiCo said that line faced ''intense competitive pressure.''
Coke shares gained 75 cents to $46.50.
Investors looked past an upbeat economic report. The Labor Department said the productivity of U.S. workers grew at a brisker-than-expected pace in the final three months of last year. The number of hours workers spent on the job fell at the fastest pace in more than a decade.
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