Economy concerns send US stocks down

A larger-than-expected drop in durable goods orders intensified Wall Street’s concerns about the US economy today and sent stocks sliding for the second day in a row. Technology issues again suffered the largest declines.

The tech-dominated Nasdaq composite index closed down 26.50, or 1.4%, at 1,817.20. On Wednesday, the Nasdaq dropped 58.02, its largest one-day point loss since July 1, 2002.

The market’s other gauges also fell, having just suffered their biggest losses in just over four months, or since May 19. The Dow Jones industrial average fell 81.55, or 0.9%, to 9,343.96, having dropped 150.03 Wednesday. The Standard & Poor’s 500 index declined 6.12, or 0.6%, to 1,003.26, having shed 19.67 in the previous session.

Investors were extending Wednesday’s huge sell-off, sparked by a surprising decision by Opec to cut oil production by 3.5% beginning in November. The move by the Organisation of Petroleum Exporting Countries, which produces about a third of the world’s crude, set off worries that higher energy prices will hamper the economic recovery.

The US Commerce Department issued disappointing economic data showing demand for durable goods dropped by a sizeable 0.9% in August, raising doubts about the manufacturing sector’s delicate recovery. The decrease in new orders for durable goods, items including cars and home appliances expected to last at least three years, was the first and largest decline in four months and bigger than the 0.5% dip economists anticipated.

Manufacturers were mixed following new of the drop in durable goods orders. Caterpillar Inc. 1.02 to 69.42, but General Motors Corp. rose 9 cents to 40.91. Both are Dow components.

In a second report, new applications for jobless benefits fell last week by a seasonally adjusted 19,000 to 381,000, a seven-month low, the Labour Department said. But at least half of the decrease was attributable to workers not being able to file claims because of Hurricane Isabel, which hit the East Coast, a department analyst said.

Dow industrial Eastman Kodak Co. slid 4.84, or 17.9%, to 22.16 after slashing its generous 1.80 annual dividend to 50 cents a share. The company’s first dividend cut in more than a century is aimed at reducing spending and increasing investment in digital markets by as much as 3 billion during the next three years.

Retailer Bed, Bath & Beyond Inc rose 30 cents to 39.72, having reported quarterly profits that beat analysts’ expectations by 2 cents a share.

Opec’s news again boosted oil stocks, including Royal Dutch Petroleum Co, up 16 cents at 45.16.

Walt Disney Co., a Dow stock, advanced 50 cents to 20.31 after Goldman Sachs upgraded it to “outperform” from ”in-line”.

The Russell 2000 index, which tracks smaller company stocks, tumbled 12.81, or 2.5%, to 495.05.

Declining issues outnumbered advancers slightly more than 2 to 1 on the New York Stock Exchange. Trading volume was moderate.