Stocks Continue Downfall

NEW YORK CITY: Stocks plummeted for the third time in seven sessions Monday, as investors moved to insulate themselves from new earnings disappointments and a possible interest rate hike. The Dow Jones Industrial Average suffered its fourth-worst point drop ever, falling 161.05 points to close at 5,349.51. That represents its steepest slide since March 8 and its lowest close since late January. The Dow has now shed 7.4 percent from its record high of 5,778.00 on May 22. The technology-heavy Nasdaq index plunged 43.60 to 1,059.89 -- the equivalent of a 220-point drop in the Dow -- and is down 15 percent from its June 5 record. The recent sell-off began July 5 when the Dow fell 114 points following a surprisingly positive jobs report, raising fears of an interest rate hike by the Federal Reserve. Last Thursday, the Dow fell 83 points, in response to disappointing earnings reports from Hewlett-Packard, Motorola and United HealthCare. Investors took that news as a signal that continued earnings growth could not be relied upon to prop up a pricey market already suffering from inflation jitters. Ironically, Monday's plunge was not triggered by stunning earnings reports or major economic news. The question now for investors is whether this recent slide is merely a temporary correction to the 5 1/2-year bull market or a signal of the coming of a bear market. -- Josh Dubow