Markets drop, still shaky

NEW YORK -- UAL's bankruptcy filing and a brokerage downgrade of IBM put investors in a black mood Monday, sending stocks sharply lower and the Dow Jones industrials down more than 170 points. \nAnalysts said many investors were tempted to sell following the market's recent two-month rally, while others were nervous about the United Nations' search for weapons of mass destruction in Iraq. \n"The market is still in a malaise," said Charles Pradilla, chief investment strategist at SG Cowen Securities. "You inject the recent news into a market still in the process of taking profits, and you get this real choppy action." \nThe Dow slid 172.36, or 2 percent, to close at 8,473.41, having fallen 2.8 percent last week to snap an eight-week winning streak. Blue-chip stocks have now declined in the last six of seven sessions to a level not seen since Nov. 13. \nThe broader market also fell. The Nasdaq composite index declined 55.30, or 3.9 percent, to 1,367.14, also the lowest since Nov. 13. The Standard & Poor's 500 index dropped 20.23, or 2.2 percent, to 892.00. \nUnited Airlines filed for federal bankruptcy court protection Monday, one of the 10 largest Chapter 11 filings in U.S. history, underscoring the troubles in the airline industry. \nDow industrial IBM, meanwhile, fell $2.73 to $79.59 after Banc of America cut the computer maker's brokerage rating to "market performer" from "buy." \nAnalysts say investors are still largely upbeat despite recent declines and should bid stocks higher by year's end. After eight weeks of Dow advances, it's expected that some investors would cash in some profits, they said. \n"December is usually one of the market's strongest months, but it's usually the last week and a half that we see the gains," said Steven Goldman, chief market strategist at Weeden & Co. in Greenwich, Conn. \n"I think after we finish this consolidation, stocks should be set up for some type of year-end rally," he said. \nInvestors also were hopeful that Treasury Secretary Paul O'Neill's resignation will bring a new approach from the government to bolstering the economy, although reaction to President Bush's nomination of CSX chairman John W. Snow as O'Neill's replacement was muted.