Stocks sink on weaker profit warnings

Warnings of weaker profits helped pull the stock market down yesterday, despite some positive economic news.

American Eagle Outfitters Inc. plunged 12.02 percent after the retailer slashed its earnings forecast in half late Monday, blaming weak sales. The company said cutting prices on clothing to lure in shoppers was hitting its profit margins. American Eagle dropped $2.40 to $17.57.

Two of American Eagle's rivals also slumped. Abercrombie & Fitch Co. lost $2.09, or 4.05 percent, to $49.57. Urban Outfitters Inc. lost $1.20, or 2.75 percent, to $42.47.

Most companies have reported better results during the second-quarter earnings season, but sales have slowed. A growing list of companies, including eBay and Marriott, has told analysts to lower their expectations for the coming quarters.

The Dow Jones industrial average was down as much as 138 points, but recovered somewhat to end the day down 93.39 points at 15,518.74.

The Standard & Poor's 500 index fell 0.57 percent to 1,697.37. All 10 sectors in the S&P 500 fell.

The Nasdaq composite index fell 0.74 percent to 3,665.77. -- AP