More evidence of a softening U.S. economy weighed on the U.S. stock markets Tuesday, dragging the major averages lower.
The Dow Jones Industrial Average fell 147 points, about one and a half percent, to 9,121. The tech-weighted Nasdaq composite dropped almost two percent. The broader Standard and Poor's 500 index was also down over 1 percent (18 points).
An earnings warning for 2002 from fast-food giant McDonald's and an analyst downgrade for leading tobacco company Philip Morris pressured the Dow Industrials.
Analysts say trading was marked more by an absence of buying than a steep sell-off. Investors pulled to the sidelines to contemplate the latest signs of a softening economy.
A new survey shows U.S. consumer confidence plunged in October to its lowest level in seven years, as more Americans lost jobs. It was a sharper decline than Wall Street anticipated.
Economist Delos Smith, who helped compile the survey, says fear of terrorism after the attacks of September 11, including the present rash of anthrax cases, played a part in the more pessimistic outlook. "You've ripped the social fiber," he said. "Everybody talks about being normal. Well, what is normal? It's not being normal when you have anthrax scares, you're scared about the mail, and you're jittery."
Some experts, including investment strategist Ron Hill, have reservations about the long-term value of such data. He said, "Retail sales were actually up versus the month of September. So, we're starting to see a rebound in here, it looks like, in some areas. So again, I think a lot of the data we're getting now is not going to be particularly useful. It's going to be another month or so before things really settle down."
In other news, Ford Motor Company, the world's second-largest auto-maker, has ousted its president and chief executive Jacques Nasser, as Ford tries to overcome more than a year of persistent troubles.
He will be replaced by William Clay Ford, a great grandson of founder Henry Ford. The new CEO promised Ford will reclaim its past glory. "In the end," he said, "the company that builds the best product wins. We're going to build the best cars and trucks in the world, and we're going to pass along a stronger company and a better world to those in the next generation."
The change of command comes after Ford lost about a billion dollars in the past two quarters, its first consecutive quarterly loss in nearly a decade.