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Nasdaq has worse day in nearly 15 months after OPEC’s surprise decision to cut oil production

SHARE Nasdaq has worse day in nearly 15 months after OPEC’s surprise decision to cut oil production

NEW YORK — The technology-dominated Nasdaq composite index suffered its biggest one-day point loss in nearly 15 months today after OPEC's surprise decision to cut oil production sent stocks tumbling. The Dow Jones industrials plunged 150 points.

News that oil producers were lowering their output starting in November exacerbated a selloff that was already under way on Wall Street today. But analysts still attributed much of the downturn to the market being vulnerable, especially in technology, to selling following its big six-month rally.

"You are coming to the end of the quarter and people are a little worried that prices might be extended. To see some profit taking at the end of the quarter is no surprise," said Richard A. Dickson, senior market strategist at Lowry's Research Reports in Palm Beach, Fla.

Larry Wachtel, market analyst at Wachovia Securities, agreed. He said many market watchers have been wondering when stocks would really pull back, because recent selloffs have been short-lived and replaced by more buying.

"You are overextended, overbought, overdone. You have no juice left on the upside," said Wachtel, who called the OPEC news "an excuse" for investors to cash in some gains.

The Nasdaq closed down 58.02, or 3.1 percent, at 1,843.70. The last time the Nasdaq had a larger one-day loss was July 1, 2002, when it shed 59.41 to close at 1,403.80.

Wall Street's other major gauges saw their biggest losses in just over four months. The Dow fell 150.53, or 1.6 percent, to 9,425.51. The Dow hasn't had a bigger one-day point since May 19, when it forfeited 185.58 to finish at 8,493.39.

The Standard & Poor's 500 index declined 19.65, or 1.9 percent, to 1,009.38. The last time the S&P had a larger one-day point loss was also May 19, when it gave back 23.53 to close at 920.77.

Investors are becoming more wary of making bigger commitments to stocks, wondering if prices are too high given six months of rallies and whether third-quarter and yearly earnings would be good enough to support Wall Street's gains.

Trepidation increased today after OPEC announced it would cut its oil production target by 3.5 percent beginning in November, an unexpected move that caused Wall Street to worry that higher energy prices will undermine the economic recovery and corporate profits. The Organization of Petroleum Exporting Countries produces about a third of the world's crude.

Wall Street's weakest spot today was the technology sector. Analysts said that was simply because investors have been doing the most buying in high-tech since the market started rallying back in March.

"That is where most of the excess has been," said Wachtel, noting that the Nasdaq has surged nearly 50 percent from its March 11 low of 1,271.47.

Among today's tech losers, Microsoft Corp. fell $1.14 to $28.46, Intel Corp. dropped $1.16 to $27.78 and Cisco Systems Inc. declined 83 cents to $20.32.

Media stocks also contributed to Wall Street's losses after Viacom Inc., owner of CBS and MTV, cut its full-year earnings forecast, saying local advertising didn't increase as much as had been anticipated. Viacom fell $1.42 to $38.90 and hurt The Walt Disney Co., down 39 cents at $19.81, and AOL Time Warner Inc., down 47 cents at $15.76.

Among gainers, The J.M. Smucker Co. climbed $1.81 to $43.58 after Deutsche Securities raised its recommendation on the food maker to "buy" from "hold."

ESS Technology Inc. advanced 36 cents to $10.51 after the maker of multimedia chips raised its third-quarter outlook to a range of a loss of 3 cents a share to a profit of 2 cents a share from an earlier range calling for a loss between 3 and 8 cents a share.

Declining issues outnumbered advancers more than 2 to 1 on the New York Stock Exchange. Trading was brisk at 1.56 billion shares, up from 1.32 billion on Tuesday.

The Russell 2000 index, the barometer of smaller company stocks, fell 11.50, or 2.2 percent, to 507.86.

Overseas, Japan's Nikkei stock average finished today up 0.3 percent. In Europe, France's CAC-40 slipped 0.1 percent, Britain's FTSE 100 advanced 0.4 percent and Germany's DAX index shed 3 percent.

On the Net:

New York Stock Exchange: www.nyse.com

Nasdaq Stock Market: www.nasdaq.com