The market ended today with traders and investors saying not only Thank God it¿s Friday, but also Thank God it¿s the end of the third quarter.

Most major indices ended the day in the red, including the

Dow Jones Industrial Average, the

Nasdaq Composite Index,

S&P 500, the

Russell 2000 and

TheStreet.com Internet Sector

index.

Sure, September is historically a bad month, but this one was particularly grim with

earnings warning after earnings warning, capped off with last night¿s from (the now) fallen

Apple

(AAPL) - Get Report

. The computer maker warned of a significant slowdown in third-quarter earnings and that its shares lost half their value on the news.

Apple, the most actively traded stock on the Nasdaq today, fell 51.9%, or $27.75 to $25.75, cutting the company's former market cap of $17.4 billion in half.

Unlike other boxmakers, which use

Microsoft

(MSFT) - Get Report

software, Apple is more or less an entity unto itself, some

contend. However, a slowdown in revenue can't be good for other PC makers, as

IBM

(IBM) - Get Report

, down only 0.4%, was downgraded several weeks ago on demand-related concerns.

Hewlett-Packard

(HWP)

dropped 6.7% and

Intel

(INTC) - Get Report

was 6.5% lower. Those Dow components had a combined drag of about 108 negative points on the index.

Also,

Dell

(DELL) - Get Report

sank 7.9% and

Gateway

(GTW)

lost 13.4%.

This week we learned that earnings warnings can¿t just be chalked up to company- or issue-specific problems like higher fuel costs, problems with a currency or bad weather -- the reasons cited by companies earlier this month. Apple plainly stated that it saw significant slowing of demand in September, which was the case as well in comments made by

Eastman Kodak

(EK)

a few days ago.

¿The macro outlook continues to have investors pinned down,¿ said Jon Olesky, head of block trading at

Morgan Stanley Dean Witter

. ¿People are nervous as can be that there's more and more evidence that the economy is slowing at an alarming rate.¿

Olesky went on to say, ¿It seems the magnitude of shortfall came in September, and that's what Kodak alluded to.¿

The mood is gloomy following warnings from

McDonald's

(MCD) - Get Report

, Intel and

Gillette

(G) - Get Report

.

Meanwhile,

Bear Stearns

(BSC)

rose 14.6% on merger speculation.

Bank of America

(BAC) - Get Report

and

TST Recommends

ABN Amro

(ABN)

are said to be possible suitors.

Market Internals

Breadth was barely positive on the Big Board, while negative on the Comp. Volume was moderate on both.

New York Stock Exchange: 1,457 advancers, 1,410 decliners, 1.1 billion shares. 137 new 52-week highs, 64 new lows.

Nasdaq Stock Market: 1,903 advancers, 2,166 decliners, 1.99 billion shares. 147 new highs, 190 new lows.

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Most Active Stocks

NYSE Most Actives

  • Liberty Media (LMG.A) : 24.6 million shares.
  • Lucent (LU) : 20.6 million shares.
  • Compaq (CPQ) : 18.5 million shares.

Nasdaq Most Actives

  • Apple: 129.3 million shares.
  • Intel: 71.7 million shares.
  • Dell: 56.9 million shares.

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Sector Watch

The American Stock Exchange Airline Index

fell 3.5% thanks to an earnings warning from

UAL

(UAL) - Get Report

. That news also socked the

Dow Jones Transportation Average

, which dropped 2%.The

Philadelphia Stock Exchange Semiconductor Index

was down 5.6% in reaction to the Apple news. Most components were down, including

Linear Technology

(LLTC)

, off 8.8%,

Applied Materials

(AMAT) - Get Report

, down 7.1% and

Teradyne

(TER) - Get Report

8.5% lower.

The

Philadelphia Stock Exchange Oil Service Index

managed to rise and ended the day up 1.7%.

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Bonds/Economy

Treasuries are stronger thanks to slumping stocks and the calendar, which traditionally favors the Treasury market on the last business day of the quarter. Pressure to own safe, liquid assets for appearance's sake often prompts buying of Treasuries by portfolio managers who report their holdings on the last day of the quarter, bond market analysts say.

The day's most important economic indicator, the

Chicago Purchasing Managers' Index

(

definition |

chart ), was stronger than expected. It rose to 51.4 in September from 46.5 in August, indicating renewed expansion in the manufacturing sector.

The benchmark 10-year

Treasury note was up 4/32 at 99 18/32, dropping its yield to 5.808%.

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International

European markets were generally weak. In London, the

FTSE 100

was off 30.1 to 6294.2. Across the channel, the

CAC 40

in Paris was 44.40 lower to 6266.63, and the

Xetra Dax

in Frankfurt lost 57.01 to 6775.75.

Asian markets jumped on Friday as U.S. markets recovered overnight, but most traders are viewing the bounce as a one-time event.

In Japan, local fund managers buying selected tech shares before the close of the fiscal first-half Sept. 30 helped the

Nikkei 225

index rise 120.30 to 15,747.26.

Hong Kong's

Hang Seng

index bounced 233.23, or 1.5%, to 15,648.98 as property and banks shares rallied.

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