NEW YORK - U.S. stocks fell yesterday as troubled investors reacted to weaker-than-expected corporate earnings reports that overshadowed signs of moderating inflation.
The Dow Jones industrial average closed down 48.44 at 10,685.12.
Broader stock indicators also fell. The Nasdaq composite index was down 112.88 at 3,981.57, and the Standard & Poor's 500 index was off 15.90 to 1,464.29.
Merck & Co. surged, limiting the Dow's decline. The drugmaker said its 2000 profit could grow faster than analysts estimate.
The Nasdaq composite fell 2.8 percent, adding to Friday's 2.2 percent decline. The Standard & Poor's 500 index lost 1.1 percent.
Elsewhere on the broad market, the Russell 2000 index of small-cap stocks skidded 8.45 to 514.25; the Wilshire 5000 index slumped 191.84 to 13,701.48; the American Stock Exchange composite index slid 9.40 to 918.24; the New York Stock Exchange composite index dropped 4.38 to 651.00; and the S&P; MidCap 400 index fell 5.44 to 498.79.
The Sun-Bloomberg Maryland index of the top 100 Maryland stocks lost 4.68 to 273.78, as Aether Systems Inc. sank $14.125 to $168.875, and Manugistics Group Inc. fell $3.875 to $57.125. Declining issues outnumbered advancers 3-to-2 on the NYSE in light trading of 880.4 million shares. Nasdaq decliners outnumbered advancers 2-to-1 in trading of 1.42 billion shares.
Dell Computer Corp. and other U.S. computer makers dropped after reports on PC sales from market-research firms IDC Corp. and Dataquest Inc. The slower-than-expected U.S. growth was largely a result of slower consumer sales and constraints on microprocessor supplies, the firms said.
Dell fell $5.9375 to $46.4375, and Hewlett-Packard Co. lost $5.1875 to $118.8125. Gateway Inc. slid $4.25 to $58.625; Compaq Computer Corp. dropped 81.25 cents to $26.9375; Apple Computer Corp. lost $4.875 to $48.6875; and International Business Machines Corp. declined $2.25 to $112.50.
Microsoft Corp. dropped $1.75 to $70.5625.
Priceline.com, an online seller of airline tickets and other items, fell $8.9375 to $31.125 after reporting second-quarter losses of a penny a share, excluding one-time expenses. The losses were narrower than those predicted by Wall Street analysts, but Priceline's revenue also came in at the low end of unofficial estimates.
Eastman Kodak Co. fell $2.25 to $55.75, adding to Friday's 3.1 percent drop after the world's largest photography company said its U.S. market share shrunk. Kodak's shares have fallen 16 percent this year.
Merck jumped $5.875 to $69.625. The world's No. 2 drugmaker also reported second-quarter profit that rose a greater-than-expected 16 percent on rising sales of pain and heart drugs.
Pfizer Inc. rose $1.9375 to $47.8125; Johnson & Johnson advanced $2.2032 to $94.4531; and Eli Lilly & Co. added $3.125 to $101.
Bear Stearns Cos. gained $3.4375 to $49.75 after a report that James Cayne, chief executive of the No. 6 U.S. securities firm, would consider selling the company. A Bear Stearns spokesman declined to comment on the report, which sent shares to their highest in two years.
Corning Inc. plunged $33.25 to $250 after news reports that it is in talks to buy part of Nortel Networks Corp.'s business in a transaction valued at more than $100 billion. Nortel fell $1 to $80.25.
Wal-Mart Stores Inc. fell $2.25 to $57.4375 after Germany's largest retailer, Metro AG, said three of its shareholders ended talks to be acquired by the world's biggest retailer.
VeriSign Inc. jumped $4.1875 to $184.625 as investors anticipated that the company's acquisition of Network Solutions Inc. will boost revenue when VeriSign reports second-quarter results tomorrow.
Overseas, Japan's Nikkei stock average fell 1.57 percent; Germany's DAX index was down 0.61 percent; Britain's FTSE 100 was up 0.05 percent; and France's CAC-40 was up 0.59 percent.