NEWS AND COMMENTARY July 24, 2000 U.S. Stocks Fall; Agilent, AOL Slip on Profit, Revenue Concern By Stephen Cohen, Bloomberg Nasdaq Bubble Bursts on Profit Warnings ... Weiss comments NEW YORK -- U.S. stocks finished their first losing week in four as Agilent Technologies Inc. warned profit will grow slower than forecast and America Online Inc. said revenue rose less than some investors expected. Semiconductor-related stocks including Intel Corp., Motorola Inc. and Rambus Inc. dropped after an industry association said investment in chip production may be slowing. Lexmark International Inc. fell after saying third-quarter profit may be weaker than expected. "Disappointing quarters from Agilent and Lexmark and bad news from the semiconductor sector are putting a lot of pressure on the market," said Alan Loewenstein, who helps manage the $3 billion John Hancock Global Technology Fund, which is up 8.2 percent this year. ``It still needs a better handle on where interest rates are going before we have an extended gain.'' The Nasdaq Composite Index fell 90.11, or 2.2 percent, to 4094.45. The Standard & Poor's 500 Index lost 15.28, or 1 percent, to 1480.19. The Dow Jones Industrial Average declined 110.31, or 1 percent, to 10,733.56. More than three stocks fell for every two that rose on the New York Stock Exchange. Some 964 million shares changed hands on the Big Board, according to preliminary figures, 1.9 percent more than the three-month daily average. We remarked last month that an economic slowdown would bring with it diminished profits, and the start of second-quarter earnings reporting confirms that prediction. Investors chose to ignore our warnings and threw their money at tech stocks - igniting a mini-rally for the Nasdaq over the past four weeks. But when it came down to companies having to pony up the good news, the bubble burst. Though earnings reports aren't as dismal as they could be, future growth is certainly being questioned. Smart investors know when to take the money and run. Smarter investors know when to bet on the market sinking further.

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