Earnings' fears push stocks downwards

New York stocks dropped sharply yesterday as investors' growing nervousness about earnings wiped out any hopes that the Dow Jones…

New York stocks dropped sharply yesterday as investors' growing nervousness about earnings wiped out any hopes that the Dow Jones industrials might soon close above 10,000. On Wall Street, the Dow dropped 218.68 points - or by 2.2 per cent - at 9,671.83, losing ground for the third session in a row after flirting with 10,000 last week.

Broader stock indicators were also hit hard. The earnings fears spread after Merrill Lynch warned that Coca-Cola's sales growth will be slowed by economic crises in Latin America and Japan.

"People are worried about corporate earnings, the most recent being Coke," said Larry Lawler, manager of equity trading at Dreyfus Corp. "But the bottom line is that people are nervous about the [Dow] breaking through the 10,000 mark, so you're seeing some profit-taking and nervousness."

The Standard and Poor's 500 fell 34.87 to 1,262.14, and the Nasdaq composite fell 73.10 to 2,322.68.