NEW YORK - The Dow Jones industrial average plunged 379 points Thursday, 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. The index has dropped in 14 of the last 16 sessions.
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 34.81 to 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. 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 a barrel at one point on the New York Mercantile Exchange, nearing their recent 10-year high of $37.80 a barrel. Crude futures closed Thursday at $36.06, up $2.81.
The same anxiety seen in oil markets drove down stocks.
''The selloff today started with the Dow stocks, the big caps, down, not technology,'' said Bill Barker, an investment consultant with Dain Rauscher. ''The market does not do well on uncertainty, and this Middle East thing is pretty uncertain and not at all predictable.''
Shares of Home Depot, the nation's largest home improvement retailer, tumbled $13.81, or 28 percent, to $35.13 after it warned Thursday of lower-than-expected earnings, primarily because of material costs.
The news sent other retailers down as well, including Wal-Mart, which fell $1.19 to $44.13. Financial stocks, which tend to be sensitive to inflation concerns, also suffered: J.P. Morgan, which is also a Dow component, fell $10.81 to $136.
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.
Declining issues outnumbered advancers by more than 3 to 1 on the New York Stock Exchange. Consolidated volume came to 1.67 billion shares, slightly ahead of the 1.66 billion shares in Wednesday's session.
The Russell 2000 index was down 11.77 at 462.97.
Overseas, Japan's Nikkei stock average rose 0.24 percent. Germany's DAX index was down 1.47 percent, Britain's FT-SE 100 rose 0.23 percent, and France's CAC-40 was up 0.58 percent.
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