US market stalls amid accounting concerns

Wall Street’s hope for a rebound fizzled today, with investors drawn to the stock market’s relatively cheap prices but hesitant amid continuing questions about accounting practices. Stocks fluctuated throughout the session before closing modestly lower.

Analysts said investors were held back by fears that other companies might be vulnerable to bookkeeping scandals like Enron’s. News that Congress was unlikely to pass an economic stimulus package also dampened investment.

‘‘It’s extremely tentative out there,’’ said Hugh Johnson, chief investment officer at First Albany Corp.

‘‘This Enron thing has done some real damage to investor confidence.’’

The Dow Jones industrial average closed down 1.66 at 9,685.43, extending a two-session, 232-point losing streak.

Broader stock indicators showed slightly larger declines. The Standard & Poor’s 500 index lost 4.42, or 0.4%, to 1,090.02, and the Nasdaq composite index slipped 17.01, or 0.9%, to 1,838.52.

The selling was in line with what has so far been a disappointing year for the market. Stock prices have been drifting consistently lower as investors try to reconcile mostly weak earnings forecasts with their hopes of a speedy recovery. Those doubts have been exacerbated by the Enron debacle, which has made investors nervous about trusting the reliability of corporate bookkeeping in general.

In trading today, Reliant Energy fell dlrs 1.98 to dlrs 22.94 on word it was restating its earnings for the second and third quarters of 2001 and postponing release of its fourth-quarter results because of internal accounting errors with certain gas and power transactions.

Tyco tumbled dlrs 6.80, or 22.7%, to dlrs 23.10, extending a selloff that began last week on fears the conglomerate’s financial statements don’t reflect the true health of the business. The losses grew on a Wall Street Journal report that Tyco had spent about dlrs 8 billion in the past three fiscal years on more than 700 acquisitions never announced to the public. Two credit rating agencies also downgraded some of the company’s debt.

Investors also sold Ciena after the optical networker reduced forecasts for the first fiscal quarter, cut 400 jobs and said second-quarter sales will be flat or down. Ciena dropped dlrs 1.12 cents to dlrs 9, a loss of 11 percent.

General Electric, a Dow component, fared better, recovering some of its loss from previous session’s broad selloff. The stock rose dlrs 1.21 to dlrs 36.21, after GE reaffirmed its expectations for profit growth this year.

Honeywell also benefited from bargain hunting, climbing 69 cents to dlrs 32.76.

But overall, the market’s mood was gloomy. Stocks did manage a brief bump up in the afternoon, but that evaporated when Senate Majority Leader Tom Daschle indicated that an economic stimulus package would likely be shelved for lack of votes. Many had hoped the measure could help bring the US out of recession.

Wall Street took little notice of a Commerce Department report showing orders to US factories rose by 1.2% in December, with gains posted for semiconductors, household appliances and machinery.

Declining issues led advancers 4 to 3 on the New York Stock Exchange. Volume totalled nearly 1.75 billion shares, ahead of the 1.44 billion shares reported on Monday.

The Russell 2000 index dropped 1.27 to 468.82.