DOW/nasdaq - there goes another 2%

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    Interesting commentary from Reuters plus JP Morgan denying liquidity problems...well, they would wouldn't they I suppose...

    Dow 8,577.23 -61.96 (-0.72%)
    Nasdaq 1,382.88 +0.26 (+0.02%)
    S&P 500 911.89 -6.04 (-0.66%)
    30-yr Bond 5.394% +0.017
    NYSE Volume 78,213,000
    Nasdaq Volume 161,425,000

    Reuters Business Report
    Stocks Tumble, Dow Falls for 7th Session
    By Chelsea Emery

    NEW YORK (Reuters) - Worries about corporate earnings slammed stocks on Tuesday, sending the blue-chip Dow Jones industrial average to its seventh-straight decline and dashing hopes for a follow-through to Monday's rebound.

    Even comments from Federal Reserve Chairman Alan Greenspan that the U.S. economy has held up "remarkably well" failed to snap widespread pessimism. The Standard & Poor's 500 index (CBOE:^SPX - News) closed at its lowest since August 1997.

    "There's more fear than fundamentals," said Thomas Garcia, who helps manage $2.5 billion for Thornburg Investment Management. "People are selling just in case earnings are weak and the (hoped-for) outlook isn't there. You know that some people are panicking right now."

    Although positive results from wireless telephone company Nextel Communications Inc. (NasdaqNM:NXTL - News) underpinned technology stocks most of the session, early gains disappeared as investors pulled out ahead of upcoming earnings from technology bellwether Intel Corp. (NasdaqNM:INTC - News).

    Caterpillar Inc. (NYSE:CAT - News) fanned worries the second-quarter earnings season will disappoint after the world's No. 1 construction equipment maker slashed its full-year outlook, citing the slow pace of capital spending. Caterpillar helped lead the Dow average to its first seven-session losing streak since the week after the Sept. 11 attacks.

    "It's a disjointed market out there," said Dan McMahon, head of block trading for CIBC World Markets. "There are concerns that companies will start guiding lower for the third quarter, even if their second-quarter earnings are in line" with expectations, he said.

    The Dow Jones industrial average (CBOT:^DJI - News) lost 166.08 points, or 1.92 percent, to 8,473.11, according to the latest available data. Earlier in the seesaw session, the Dow almost clambered into positive territory before dipping again.

    The broader Standard & Poor's 500 Index (CBOE:^SPX - News) was down 16.99 points, or 1.85 percent, at 900.94. The technology-laced Nasdaq Composite Index (NasdaqSC:^IXIC - News) slumped 7.36 points, or 0.53 percent, at 1,375.26, after spending most of the session on the plus side.

    Comments from Greenspan did little to reassure Wall Street. In his semiannual monetary policy testimony to Congress, Greenspan lauded the U.S. economy's resilience but warned that wounds from corporate scandals and a stock rout will take time to heal.

    "He pretty much said everything's going to be OK but nobody believed him," said Garcia. "People are concentrating on whether earnings are going to be as good as we think."

    The market has endured some rocky sessions over the past few weeks and is floundering near 5-year lows as fears of more accounting scandals and apprehension over the second-quarter earnings season rattle investors.

    Some traders remained on the sidelines ahead of results from Intel Corp. (NasdaqNM:INTC - News), the world's No. 1 maker of computer chips, expected to report financial results after the market closed. Shares dipped 76 cents to $18.36.

    Roughly two-thirds of S&P 500 companies and half of the Dow 30 members are set to release results over the next two weeks. Earnings for S&P 500 companies are expected to slip 1.3 percent in the second quarter from year-ago levels, according to research firm Thomson First Call.

    Wary investors are sifting through the first wave of quarterly earnings reports, desperate for signs of a turnaround in battered corporate profits. Nextel, the nation's No. 5 wireless telephone company, offered some good news by posting a quarterly profit that was driven by strong customer demand.

    Nextel gained $1.53, or 30.6 percent, to $6.53 and was the most active share on the Nasdaq. Other wireless stocks surged, including AT&T Wireless Services (NYSE:AWE - News), which climbed 20 cents, or 3.3 percent, to $6.20.

    Also on the upside, Parametric Technology Corp. (NasdaqNM:PMTC - News) advanced 25 cents, or 8.3 percent, to $3.26 after the software maker said its net loss widened but stuck by its revenue outlook and forecast for breaking even in the fourth quarter.

    But Caterpillar sank $2.19 to $43 after the Dow component reported lower second-quarter earnings and cut its full-year forecast as capital spending remains weak.

    Discount retailer Target Corp. (NYSE:TGT - News) fell $1.82, or 5 percent, to $34.62 after saying weekly sales fell below its plan. Wal-Mart Stores Inc. (NYSE:WMT - News) also fell, dropping $3.56 to $49.88, even after saying healthy demand for household items and food helped keep sales within its July growth forecasts.

    Diversified health-care group Johnson & Johnson (NYSE:JNJ - News) gained $1.10 to $50.10 after the Dow member said quarterly profits rose 11.5 percent, fueled by strong sales of medical devices and prescription drugs.

    Home improvement retailer Home Depot Inc. (NYSE:HD - News) rose 54 cents to $30.54. The Dow component reaffirmed its long-term revenue and earnings goals and announced the repurchase of up to $2 billion of its stock.

    General Motors Corp. (NYSE:GM - News), the world's No. 1 automaker, lost $2.08 to $45.84. The Dow member posted a sharp rise in its earnings as it slashed costs and racked up strong U.S. sales. But worries persisted the stock market drop could make it more difficult for automakers to fund their pension plans.

    J.P. Morgan Chase & Co. Inc. (NYSE:JPM - News) added pressure to the Dow with a drop of $1.58 to $28.50. The No. 2 U.S. bank holding company, scheduled to report second-quarter results on Wednesday, denied rumors in European markets that it was having liquidity problems.

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