Oil prices cause market shock

NEW YORK (AP) - The Dow Jones industrial average plunged 379 points yesterday, nearly dropping below 10,000, as new Mideast violence and soaring oil prices compounded worries about weak company profits.

The Nasdaq composite index fell to its lowest close this year, extending a post-Labor Day slide dominated by fears that technology companies aren't growing fast enough to justify lofty stock prices.

Home Depot led the Dow's decline after the retailer became the latest blue chip company to warn it would not meet third-quarter expectations.

The Dow closed down 379.21 at 10,034.58, the lowest it's been since March. It was its fifth-largest point drop ever, but the 3.6 percent decline did not even approach the top 25 percentage losses.

Broader markets also fell. The Nasdaq composite closed down 93.81 to 3,074.68 - its lowest close of 2000. The Standard & Poor's 500 index tumbled 34.81to 1,329.78.

"In an already nervous market, this is all we didn't need,'' said Al Goldman, an analyst with A.G. Edwards & Sons Inc. in St. Louis. "A terrorist attack, increased hostilities in the Middle East and a spike in oil prices - shake it all up and you get blind dumping of stocks.''

The apparent terrorist attack on a U.S. military ship in Yemen sent oil prices up as much as 10 percent, helping to re-ignite inflation fears. And Israeli combat helicopters rocketed Palestinian leader Yasser Arafat's residential compound in the Gaza Strip as well as a West Bank town in retaliation for the brutal slayings of three Israeli soldiers.

Oil prices reached $37.00 a barrel at one point on the New York Mercantile Exchange, nearing its recent 10-year high of $37.80 a barrel. Crude futures closed yesterday at $36.06, up $2.81.

Meanwhile, shares of Home Depot, the nation's largest home improvement retailer, tumbled $13.81, or 28 percent, to $35.13 after it warned yesterday of lower-than-expected earnings, primarily because of material costs.

The news sent other retailers down as well, including Wal-Mart, while financial stocks also suffered.

Fears that higher oil costs would hurt airlines sent Continental Airlines down $2.75 at $41.19. Airplane manufacturer Boeing fell $4.06 to $56.13.

Technology stocks were mixed. Chip maker Advanced Micro Devices rose 31 cents to $22.13 after reporting earnings ahead of Wall Street expectations late Wednesday. Intel rose $1.75 to $37.13. But Yahoo tumbled again on worries about future earnings, falling $8.75 to $56.63. Lonik helped Manny and his neighbor obtain a conservation easement for their combined 220 acres of land.

"My job is to work with them initially," Lonik said, and provide "hand-holding through the lengthy process."

Manny and his neighbor applied for the sale in 1997. Lonik said only 70 of 1,200 farm owners statewide that have applied have been able to complete the sale.

"There is not enough money to accommodate the many, many people in line for this," said Hansen, whose district encompasses western Washtenaw County, including the University's North Campus.

Hansen compared stopping the spread of urban sprawl to extinguishing a forest fire. Rural land tends to form rings around a city. By protecting one of these rings against development, farmers can stop development from spreading, just as firefighters cut down a row of trees to put out a forest fire.

Glickman spoke of the importance of Michigan's agriculture, the state's number two industry behind the automobile industry.

The state ranks second in production diversity, but it also has the nation's fourth fastest rate of converting farmland into new development.

"If we're going to make progress of conservation in this country, it's got to be helping people to do it themselves," Glickman said. "This is not the heavy hand of the government," he said.

Incentive programs are the way to stop urban sprawl, he said.

Often on opposite sides of the fight, Glickman said agriculturists and environmentalists should build a bridge to bring their causes together.

"Farmers and environmentalists don't have to beat each other's throats," he said.

Jan Ben Dor, an advocate against urban sprawl in Washtenaw County and an observer at the event, said she supports the legislators' visions.

"I'm so excited. I've been one of Dan Glickman's big fans for a long time," she said. "They've done very well with very little resources."