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Tuesday, 9 July, 2002, 21:01 GMT 22:01 UK
Shares dive in US
President George Bush
Was his attempt to reassure all in vain?
Shares have dived in the US, just hours after President Bush announced his plan to instil confidence in corporate America.

The Dow Jones industrial average fell 178.81 points, or 1.93%, to 9,096.09, its biggest percentage fall in about five weeks.

Mr Bush made a speech to business leaders, following a string of corporate accounting scandals at firms such as Enron and WorldCom.

Many investors had already questioned whether the President's call for higher ethical standards in business would restore confidence. The fall in share prices further highlights their unease.

Investor doubts

In his speech, he recommended longer prison sentences for corporate fraud as well as the creation of a taskforce to prosecute corporate fraudsters.

Doubts remain that these plans go far enough.

"It appears for now we still are experiencing a scandal a day which is keeping confidence at bay," said Alan Ackerman, market strategist at Fahnestock & Co.

"I don't think anybody really believes there's enough teeth put in the system,'' said Timothy Leach, chief investment officer of Wells Fargo Private Client Services, said. "I don't think Bush helped anything.''

Sectors weak

The general mood may have been driven by President Bush's speech, but some specific sectors also had their own bad news to contend with.

Drug stocks fell, as questions arose about the safety of one of Wyeth's hormone treatment products. Its shares closed $11.94 lower at $37.30, dragging the stock exchange's drug index 4.4% lower.

Shares in PepsiCo tumbled after its largest bottler said sales were poorer than expected.. Its shares closed $4.64 lower at $27.75.

Semiconductor stocks were weak across the board after a Merrill Lynch analyst lowered his rating on chip equipment makers.

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09 Jul 02 | Business
09 Jul 02 | Americas
03 Jul 02 | Business
09 Jul 02 | Business
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