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Dow Drops Below 10,000

U.S. stock prices tumbled on Wall Street Thursday, sending the "blue chips" below 10,000 to their lowest level since April. Once again, investors were nervous about the impact of shrinking corporate earnings in a sluggish global economy.

The Dow Jones Industrial Average plunged 171 points, 1.66 percent, to 9,920. The broader Standard and Poor's 500 index fell 20 points, 1.75 percent to 1,129, while the tech weighted Nasdaq composite closed 2.8 percent lower at 1,792.

Market watchers fretted over the dip in the Dow. But traders appeared more sanguine. Scott Bacipalupo, Merrill Lynch, said, "It's really not a technical number. It's more of a psychological number when it breaks 10,000. Albeit it's a headline, traders on the street don't really focus on the 10,000 barrier."

Still, investors were not buying, especially after more warnings by some big name companies. Network computer maker Sun Microsystems said it expects to lose money this quarter because of falling sales in Japan and Europe. Fiber optic leader Corning announced layoffs and plant shutdowns due to softening demand.

Meanwhile, European Union regulators have widened their investigation into Microsoft to determine whether the software giant may be violating anti-trust laws by tying its Media Player to its Windows operating system. Microsoft shares fell more than five percent.

The latest measure on the U.S. economy shows personal income rose .5 percent in July, the biggest increase in nine months. But personal spending went up just .1 percent, the lowest monthly gain since last October. The U.S. economy depends on consumer spending for a big portion of its growth.

Analyst James Maguire says nothing was positive for the market. Among the negatives was uncertainty about European interest rates, which impacts U.S. companies that depend on European sales. "The market got off to a very rough start," he said. "The European Central Bank cut rates. But it didn't seem to indicate that there would be further cuts down the track. Also, we got news sort of indicating there is no sign of an economic turnaround just yet. And that just compounded the fragile psychological state this market is in."

The Dow Industrials have lost over 500 points in four sessions. And there is still one day left to the trading week and to a dismal August on Wall Street, before investors and traders head out for the long Labor Day weekend.