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Wall Street Stocks Finish Lower A renewed rise in crude prices and a profit warning from a leading technology company sent US equity indices sharply lower on yesterday amid fears that the current "soft patch" in the US economy could be more serious than initially thought. By midsession, the Dow Jones Industrial Average eased 0.8 per cent to 9,860.45 while the S&P; 500 index gave up 0.7 per cent to 1,068.04. The Nasdaq Composite index lost 1.2 per cent to 1,761.75. Crude oil futures rose past the psychologically important $45 owing to renewed fears about supply caused by a combination of factors. Despite the fact that crude prices are half of their all-time highs in real terms, the perception of record prices depressed stocks. Investors have began to link rising crude prices to a slowing economy following the statement from the Federal Reserve earlier this week. While the Fed appeared to see it as a transient phenomenon, the prospect of oil prices remaining high has fuelled fears of decreased profitability in Corporate America. Tobias Levkovich, US equity strategist at Smith Barney, wrote to clients that investor sentiment was becoming excessively negative according to a series of indicators. While this raises the possibility of a rally later in the year, Levkovich said things were likely to get worse before they get better. Investors ignored employment data hinting that the US labour market might be improving, contrary to the signal given by monthly employment data released almost a week ago. The number of Americans filing for unemployment benefits fell slightly last week, according to the US government. The less volatile four-week moving average of the indicator also eased. On the corporate front, Hewlett-Packard shares plunged 17.1 per cent to $16.19 after the computer company warned its earnings for the current quarter would miss analyst estimates. Coming on the heels of worrying news from networking and semiconductor companies about softening demand for new technology, HP's announcement heightens fears that business investment could be slow to resume in the US economy. As a result, investors are keen to hear upbeat news from Dell Computer, which releases quarterly results after the close. By midsession, Dell's shares were 1.6 per cent lower at $33.02. Who Are We ? | About THISDAYOnLine.com | THISDAY People | Contact Us © Copyright 2000 Leaders & Company Limited

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