20 years later, it's another plunge

NEW YORK - The Dow Jones industrial average dropped more than 360 points yesterday - the 20th anniversary of the Black Monday crash - as lackluster corporate earnings, renewed credit concerns, and rising oil prices spooked investors.

The major stock market indexes turned in their worst week since July after Caterpillar Inc., one of the world's largest makers of construction equipment, soured investors' mood yesterday with a discouraging assessment of the U.S. economy. In a week dominated by mostly negative results from banks facing difficult credit markets and rising mortgage delinquencies, investors appeared surprised that an industrial name was feeling an economic pinch, too.

Reports from Honeywell International Inc. and 3M Co., also big industrial names, gave investors little incentive to take chances on the market. In one bright spot, Google Inc. reported a stronger-than-expected profit, drawing a number of analyst upgrades.

Investor sentiment took another hit when Standard & Poor's again reduced its ratings on residential mortgage-backed securities. The latest reduction, on more than 1,400 types of securities, added to investors' unease about credit quality.

And oil prices added to investors' worries after briefly moving above the psychological barrier of $90 a barrel for the first time.

The Dow fell 366.94, or 2.64 percent, to 13,522.02. The index was down for the fifth straight session, and was off 4.05 percent for the week. The blue-chip index is now up 8.5 percent for the year, however.

Broader stock indicators also were sharply lower yesterday. The Standard & Poor's 500 index fell 39.45, or 2.56 percent, to 1,500.63, and the Nasdaq composite index dropped 74.15, or 2.65 percent, to 2,725.16. For the week, the S&P 500 fell 3.92 percent and the Nasdaq fell 2.87 percent.

Yesterday's pullback pales in comparison to what investors faced 20 years ago. On Oct. 19, 1987 - Black Monday - the Dow plunged 23 percent amid concerns about interest rates and slowing economic growth. A decline of similar proportion given the market's current levels would mean a drop of some 3,000 points.

Yesterday's decline was the 9th-biggest point drop in the Dow since Black Monday.

A decline yesterday in the NYSE composite index proved steep enough to trigger trading curbs, which restrict certain types of sell orders. Those types of protections were put in place as part of the response to Black Monday.

After touching $90.07 overnight, light, sweet crude fell 87 cents to settle at $88.60 on the New York Mercantile Exchange. Prices have spiked amid forces such as a weak dollar and thin supplies at a key Midwest oil terminal.

Caterpillar fell $4.09, or 5.3 percent, to $73.57 after its third-quarter earnings rose 21 percent but fell short of Wall Street's expectations. In addition, the company lowered its full-year forecast.

Honeywell, a diversified manufacturer, turned in a 14 percent increase in its third-quarter earnings. The company raised its forecast for full-year earnings to the high end of its previously targeted range. An analyst described profit margins at the company's transportation and automation and controls segments as disappointing, however. The stock declined $2.37, or 3.9 percent, to close at $58.32.

3M, the maker of Scotch tape and Post-It Notes, said its quarterly profit jumped 7 percent amid strong growth across all regions, but sales missed expectations. The company raised its profit outlook for the full year. 3M also announced plans to cut prices on its profitable films for LCD television screens. Its stock fell $8.11, or 8.6 percent, to $86.62.

Wachovia Corp. fell $1.74, or 3.6 percent, to $46.40 after reporting that its third-quarter profit fell 10 percent due to write-downs related to difficult credit-market conditions. The nation's fourth-largest bank signaled increasing credit troubles ahead.

Google rose $5.09 to $644.71 after the search-engine leader said advertising spending lifted third-quarter profit by 46 percent.