NEW YORK -- U.S. stocks fell yesterday, led by economic bellwethers Georgia-Pacific Corp. and Dow Chemical Co., on concern that next year's earnings might not meet expectations.
"I don't think it's a great environment for the traditional cyclical stocks," said Robert Freedman, chief investment officer at John Hancock Mutual Funds in Boston, which manages nearly $19 billion in assets. "The economy is not about to take off."
Paper and forest product stocks tumbled after Georgia-Pacific, the nation's largest maker of building materials, warned that fourth-quarter profits won't live up to analysts' forecasts. The company blamed soft prices and weak demand for pulp and containerboard.
The Dow Jones industrial average fell 9.4 to 5,174.92, its third decline in four days. Eastman Kodak Co., AlliedSignal Inc., United Technologies Corp. and Union Carbide Corp. all fell a point or more.
A gain in Boeing Co. pared the Dow's loss. The Seattle-based aircraft maker climbed $1.50 to $74.375 on expectations that striking machinists will approve a new contract today, ending a 68-day strike.
In the broad market, the Standard & Poor's 500 index, representing about 75 percent of the entire market, dropped 0.74 to 618.78. Paper, bank, computer, semiconductor and software stocks led the decline. The Nasdaq composite index fell 9.42 to 1,052.07.
The Wilshire 5,000 index skidded 115.17 to 6,058.41 and the Russell 2,000 index of small-company stocks fell 0.51 to 311.56.
The NYSE's composite index fell 0.37 to 329.80. The Standard & Poor's 500-stock index was down 0.74 to 618.78, and the American Stock Exchange market value index fell 0.11 to 535.54.
Nearly 13 stocks fell for every nine that rose in trading on the New York Stock Exchange, where volume increased to 349.4 million shares from Monday's 342.1 million.
Paper and forest product stocks tumbled for a second day after the Georgia-Pacific announcement. Merrill Lynch & Co. downgraded investment opinions on 11 paper stocks.
Georgia-Pacific slid $3 to $66; Champion International Corp. skidded $2 to $40.875; Willamette Industries dropped $1.25 to $55.75; and Boise Cascade Corp. dropped $1.375 to $32.875.
Kimberly-Clark Corp. and Scott Paper Co. both rose on news that stockholders approved the former's takeover of the latter.
Chemical stocks weakened in response to reports of lower methanol and polyvinylchloride prices. Borden Chemical and Plastics LP slid $2 to $13.125; Dow Chemical Co. dropped 87.5 cents to $70; Union Carbide fell $1.125 to $37.625; Georgia Gulf Co. fell $1.25 to $34.125; and Lyondell Petrochemical Co. dropped 87.5 cents to $24.
Shares of semiconductor and computer-related companies dropped after a report showed that in November new computer chip orders fell to $114 for every $100 worth shipped, down from $118 in October. The ratio had been expected to decline slightly as sales of some computers slowed and inventories increased before the holiday.
Intel Corp. fell $1.25 to $62.25; LSI Logic Corp. fell $2.375 to $34; Texas Instruments Inc. dropped $1.75 to $54.50; Analog Devices declined $2 to $33.50; Micron Technology Inc. fell $1.50 to $53.25; Novellus Systems Inc. dropped $2 to $57.50; and International Rectifier Corp. fell $1.25 to $46.625.
Eastman Kodak shares fell $2.125 to $68.
A report showing that inflation accelerated in November raised concern that the Federal Reserve may not lower interest rates this month, hurting bank stocks.
Citicorp slumped $2 to $65.75; Bank of Boston fell $1.25 to $45.375; Boatmen's Bancshares Inc. fell $1.375 to $40.75; Suntrust Banks Inc. declined $1.50 to $67.125; and Republic New York Corp. dropped $1 to $63.375.