Updated from 4 p.m. EST
Stocks took a beating Monday as another bout of investor paranoia over bookkeeping practices eclipsed optimistic news from some technology names.
Dow Jones Industrial Average closed down 220 points, or 2.2%, to 9687. The
Nasdaq fell 56 points, or 2.9%, to 1855.5, and the
S&P 500 was down 28 points, or 2.5%, at 1094.
was again falling after
The Wall Street Journal
reported that the company spent about $8 billion over the past three years on 700 acquisitions that were never disclosed in press releases.
Tyco responded that the deals were too small to enumerate and weren't material to its overall financial condition. The company's shares were among the most active issues on the
, falling $6.31, or 17.7%, to $29.32.
Standard & Poor's on Monday cut several ratings for Tyco and its Tyco Capital finance arm, and the firm may change the ratings again, but said the conglomerate has answered questions about its accounting practices "to Standard & Poor's satisfaction."
also was tumbling after disclosing that its bank lenders believe it might be in default of its credit agreement. The company, which also reported a big loss, disputes the default characterization but said it will restructure its balance sheet. The company's shares were down 42 cents, or 29.6%, to $1. The news also took a toll on former parent
, which last week said it might face some liability for Williams Communications. Its shares were off $2.62, or 13.8%, to $16.38.
was one of the biggest losers of the day after the company said it was being investigated by the
Securities and Exchange Commission
. Shares of Enterasys fell $6.57, or 60.8%, to $4.23.
, which, like Enterasys, is a
spinoff, was being dragged down as well, losing $1.77, or 11.3%, to $13.95. Riverstone issued a press release saying that it wasn't an affiliate of Enterasys and that the SEC wasn't investigating the company.
The company whose meltdown put the accounting issue in the public consciousness was still in the news. The Senate Commerce Committee said it planned to subpoena former
chief executive Kenneth Lay. Lay had abruptly canceled testimony before the Senate panel on Monday and another appearance Tuesday before a House financial services subcommittee. A lawyer for Lay cited the increasingly "prosecutorial" attitude of lawmakers.
Chip-equipment stocks were higher after Goldman Sachs upgraded several companies in the group to overweight from market perform. The firm said orders are likely to rise sequentially for the next few quarters. At least two other firms also offered positive comments on the sector.
ended the session unchanged at $22 after the company raised its guidance for the first quarter, citing a spike in demand for its products. H-P now expects revenue to increase sequentially, and the company said it likely would beat analysts' earnings estimates for the quarter.
also fell. The company warned that 2002 earnings will come in well below expectations because of delays in launching its new products. The forecast came after the Dublin-based drugmaker posted fourth-quarter earnings of 56 cents a share, in line with Wall Street's estimates, and ahead of the year-ago earnings of 45 cents a share. Revenue for the quarter rose 15% to $487.6 million, but fell short of the consensus estimate. The stock fell $15.20, or 50.8%, to $14.75.
Online ticket seller
posted fourth-quarter earnings of a penny a share, excluding several items, and said it was comfortable with Wall Street's estimates for 2002. Analysts were expecting the company to break even for the quarter, excluding items. Investors were not impressed by the results, however, as shares fell $1.49, or 23.6%, to $4.83.
Homebuilding stocks received a boost after
raised its forecast for the fourth quarter, saying sales were better than expected due to unusually warm weather. Shares of the home improvement outfit added 59 cents, or 1.3%, to $46.29.
saw its shares drop 15.3% to $8.14 as the company struggles to cope with falling wholesale prices and a decrease in technology spending, problems that have plagued the entire telecom sector.
Overseas, stocks were primarily lower. Japan's Nikkei ended down 1.6% to 9632, but Hong Kong's Hang Seng managed to rise 0.3% to 10,721. London's FTSE 100 was off 0.4% at 5167, and Germany's Xetra Dax was lower by 1.9% to 4999.
Elsewhere, Argentina was in the headlines again. The nation's banks will be closed Monday and Tuesday following a Supreme Court ruling that said the government's freeze on bank accounts was unconstitutional. Government officials feared a massive selloff in banking shares.
Treasuries were higher. The 10-year note was recently gaining 19/32 to 100 23/32, yielding 4.90%.