Updated from 4:05 p.m. EST
Stocks slid to fairly sizable losses Monday, as poor liquidity amplified downward pressure created by a report that Iraq was balking at the conditions of a U.N. weapons inspection.
A shakeup at
and a downgrade of
also kept buyers sidelined.
Dow Jones Industrial Average
fell 178.2 points, or 2.1%, to 8359, while the
finished down 40 points, or 3%, to 1319. The
ended down 18.6 points, or 2.1%, to 876.2. The bond market was closed for Veterans Day.
Volume was light on the major exchanges, with a total of 1.1 billion shares changing hands on the
New York Stock Exchange
and 1.1 billion shares moving on the Nasdaq.
"We are seeing very quiet trading and a lack of liquidity," said Bob Basel, a trader at Salomon Smith Barney. "People may be taking profits after the recent run. The market is directionless."
Virtually every sector of the market closed lower after an Iraqi Parliament official reportedly said Monday that many of the U.N.'s latest demands "cannot be met." Crude oil traded up at $26.27 on the news. Iraq has until Friday to accept the terms of a U.N. weapons inspection.
Last week, President Bush said Baghdad faces "serious consequences" if does not comply with the order. The United States is reportedly preparing to send 250,000 troops to carry out a bombing campaign.
Some traders believe that stocks would be where they are on Monday even without Iraq's dissension. "The market was already heading in this direction," said Tim Heekin, a trader at Thomas Weisel Partners, adding that he expects the S&P 500 -- up about 13.5% since a low on Oct. 9 -- to bottom around 866.
Oracle fell 5.2% to $9.05 after Deutsche Securities lowered its rating on the stock to hold from buy on valuation concerns. The brokerage raised its price target to $9.70, but said it had limited upside from there.
Weighing on the Dow, shares of Hewlett-Packard dropped 11% to $14.85 after president Michael Capellas resigned to pursue other job opportunities. He is reportedly the top candidate to succeed outgoing
CEO John Sidgmore. The
Wall Street Journal
cited a source who said WorldCom board had "already signed off" on the appointment, while creditor representatives are also enthusiastic about the choice. Capellas' ability to get the merger of H-P and Compaq done despite intense outside opposition is reportedly what's making him an attractive candidate for WorldCom.
A story over the weekend said
is mulling its own line of personal computers, a prospect that could strike fear into the likes of
cited an analyst who said the giant retailer is preparing to launch a proprietary line in the next 12 to 18 months. A spokeswoman for Wal-Mart said the company had no such current plans. Wal-Mart lost 1.9% at $53, while Dell declined 2.3% at $29.11.
Elsewhere, shares of
surged 16% to $46.64 after the company agreed to be acquired by
Laboratory Corp. of America
for $47.50 a share. Laboratory Corp. ended off 5%.
closed down 3.6% at $24.21 amid reports Warren Buffett has put in an offer for the conglomerate's Employers Reinsurance.
rose 8.8% to $3.57 after it negotiated wage cuts with its flight attendant union over the weekend. The airliner is currently meeting with government officials to discuss the terms of its $1.8 billion loan request.
Stocks finished last week mixed, with the Dow up 19 points, or 0.2%, at 8537.06, the Nasdaq nudging down 1.4 points, or 0.1%, to 1359.4, and the S&P 500 lower 6.2 points, or 0.7%, to 894.74.
A lack of economic news could make for slow trading on Tuesday and Wednesday before the week's key reports, on retail sales and industrial production are released Thursday and Friday, respectively.
Companies scheduled to report earnings later this week include retailers
, Wal-Mart, as well as tech outfits
Overseas, London's FTSE 100 was down 0.5% to 4016 and Germany's Xetra DAX was down 1.2% to 3042. Japan's Nikkei was down 2.7% to 8460, while Hong Kong's Hang Seng was down 1.9% to 9581.