US stocks fall

US investors opted for caution today and sent stocks lower for a second day. The Dow Jones industrials lost 35 points, reaching a six-week low.

A bearish earnings announcement from JP Morgan Chase helped push the Dow down as much as 156 points before the blue chips recovered some ground on afternoon bargain hunting.

“The financial sector is getting blasted again based on the JP Morgan pre-release. That’s having a rollover effect,” said Tony Cecin, director of institutional trading at US Bancorp Piper Jaffray in Minneapolis. “You also have a continuing push on Iraq.

“But today, I think it’s more related to the perception that third-quarter earnings are not going to be what people are hoping for,” he said.

The Dow Jones industrial average fell 35.03, or 0.4%, to close at 8,172.52. The finish, which came after a 173-point drop on Tuesday, was the lowest since August 5, when blue chips closed at 8,043.63.

The broader market also finished lower. The Nasdaq composite index fell 7.82, or 0.6%, to 1,252.12. The Standard & Poor’s 500 index dropped 4.04, or 0.5%, to 869.48.

Analysts say investors have become increasingly jittery in the past month amid concerns about the strength of the economic recovery, a war with Iraq, and the fact that September is historically the worst month on Wall Street.

Since August 22, the Dow has dropped nearly 900 points, due in part to a stream of mixed economic reports that failed to reassure investors of a comeback.

Disappointing earnings announcements, which began in full force this week, also put pressure on the market today.

JP Morgan Chase fell dlrs 1.11 to dlrs 20.44 after the bank said third-quarter profits would fall well below second-quarter earnings. The news dragged down the banking sector, including Citibank, which declined 69 cents to dlrs 29.11.

Tech stocks fell in concert with Oracle, which dropped 71 cents to dlrs 8.32 after the software maker predicted lower revenue in the current quarter due to weak sales.

Meanwhile, mixed economic reports added to the market’s caution.

The Labour Department reported today that consumer inflation rose 0.3% in August, the biggest gain in four months. The lack of inflation pressures has been a main reason the Federal Reserve has been able to leave interest rates at a 40-year low.

But the Commerce Department reported that the US trade deficit fell to dlrs 34.6 billion in July as exports rose for a fifth straight month.

Hershey fell dlrs 8.81 to dlrs 65 after the charitable trust that controls the sweetmaker said it would not sell the company.

Nike rose dlrs 1.35 to dlrs 43.05, after the athletic shoemaker reported first-quarter earnings that beat analysts’ expectations.

Declining issues outnumbered advancers about 4 to 3 on the New York Stock Exchange. Volume was moderate.

The Russell 2000 index, which tracks smaller company stocks, fell 2.56, or 0.7%, to 376.75.