Updated from 3:25 p.m. EST
Stocks closed sharply lower Wednesday, as the collapse of the
merger, coupled with negative comments from the technology sector, sparked selling that worsened throughout the session.
Dow Jones Industrial Average suffered another triple-digit loss, falling 160.74 points, or 1.6%, to 9711.86. The
Nasdaq was down 48 points, or 2.5%, to 1887.97, and the
S&P 500 was off 20.98 points, or 1.8%, to 1128.52.
Dynegy called off its proposed merger with Enron shortly after Enron had its debt rating downgraded below investment grade. Enron's shares plummeted $3.50, or 85.2%, to 61 cents. Dynegy lost $4.93, or 12.1%, to $35.96. More than 180 million Enron shares changed hands on the
New York Stock Exchange, out of a total volume of 1.39 billion shares.
sold off following cautious comments from Credit Suisse First Boston. The networker's shares dropped $2.38, or 11.8%, to $17.81.
Applied Micro Circuits
saw its shares get roughed up as well, dropping $1.82, or 11.9% to $13.50.
was under selling pressure after being downgraded to sell from hold by Prudential, which cited a weak holiday season ahead and the stock's valuation. Shares of the apparel chain slid 80 cents, or 5.6%, to $13.60.
Among the major sectors, banks, chipmakers, utilities and Internet stocks were all under pressure.
Goldman Sachs issued a midquarter report on the software sector, arguing that business has improved in the last two months, but that it's already reflected in stock prices. Analyst Thomas Berquist wrote in a research note, "At this point in the quarter we are most comfortable with large-cap vendors such as
." The firm said it would be a buyer of these stocks if valuations came down to a range of 40 to 50 times earnings.
The war on terrorism continued in Afghanistan as U.S. Marines and special forces commenced a ground initiative to capture Osama bin Laden. In Germany, U.N.-sponsored talks continued for the second consecutive day as anti-Taliban groups discussed their plans for governing Afghanistan.
Overseas, European stocks were mostly lower. London's FTSE 100 lost 1.2% to 5205, and Germany's Xetra DAX fell 2.8% to 4916. Asian stocks were also under selling pressure, with the Nikkei 225 finishing down nearly 3% at 10,625 and the Hang Seng losing 1.7% to close at 11,066.
Around 4 p.m. EST, the 10-year Treasury was down 6/32 to 100 14/32, yielding 4.94%.