Markets make dramatic drop
Stocks fall as investors call a time-out one day after propelling the Dow Jones Industrial Average above the 11,000 milestone.
The Dow fell 128.58 points to 10,886.11, while the tech-heavy Nasdaq Composite Index dropped 50.46 to 2,485.12.
MCI WorldCom reportedly is considering joining cable operator Comcast in an attempt to outbid communications giant AT&T for MediaOne group, the New York Times reported. MCI WorldCom fell 1.13 to 82.94, Comcast fell 1.81 to 64.13, AT&T rose .5 to 51.56, and MediaOne dropped 2.06 to 77.63.
As reported yesterday, MediaOne's board of directors accepted AT&T's $62 billion bid, giving fellow cable operator Comcast until Thursday to make a counteroffer or walk away. MediaOne's board had accepted AT&T's $85 cash-and-stock merger offer announced April 22, which the company said yesterday constitutes a "superior proposal" to the previously announced Comcast agreement.
In the cable sector, stocks were mixed. Cox Communications edged higher .5 to 78.25, Sprint rose 1.19 to 105.63, and US West slipped .56 to 53.31.
Earlier today software giant Microsoft, an investor in Comcast, reportedly said it's considering creating a tracking stock that would include its Internet holdings if it enters bidding for MediaOne, the Wall Street Journal reported, citing people familiar with the situation.
Shares of Microsoft, which jumped at the open, fell 1.81 to 78.06.
In the computing sector, PC hardware stocks closed lower. Shares of IBM dipped .25 to 212, and Compaq closed down .44 at 22.69. Gateway slipped 1.13 to 66, Apple fell 3.06 to 46.5, and Dell dipped 1.25 to 40.81.
Internet stocks fell into the red after hovering in positive ground all day. Yahoo fell 3.31 to 159.25, Excite gained .44 to 138.19, Infoseek slipped 2.88 to 44.94, and America Online plunged 6 to 127.13.
In other news, shares of Goldman Sachs closed at 70.38, up 17.38, or 32.78 percent. The investment research firm yesterday sold 69 million shares at $53 each, raising $3.66 billion.
Bloomberg and Reuters contributed to this report.