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U.S. Stocks Fall with Focus on Accounting Practices
Sunday, February 17, 2002
The Straits Times Interactive

Profit reports by IBM and Nvidia come under close scrutiny

NEW YORK
US stocks fell after questions about accounting practices at International Business Machines (IBM) and chipmaker Nvidia again eroded investor confidence in company profit reports.

'Investors are focused like a laser beam on accounting issues,' said Mr Robert Bloom, president of LF Capital, which manages US$1 billion (S$1.83 billion).

IBM accounted for a third of the fall in the Dow Jones Industrial Average, down 98.95, or 1 per cent, to 9,903.04.

The Nasdaq Composite Index fell 38.17 points, or 2.1 per cent, to 1,805.20.

Computer-related and phone-related shares made up more than half the decline in the Standard & Poor's 500 Index, which dropped 12.30, or 1.1 per cent, to 1,104.18.

WorldCom, the second-largest telecommunication company, contributed to the drop after an internal audit found that about 12 of its sales people improperly boosted their commissions, costing the company as much as US$4 million.
(More: The Straits Times Interactive News Source)
2002 © Singapore Press Holdings.

Absolutely amazing:
WorldCom slid 39 US cents to US$6.73 after saying the improper commissions could cost it US$4 million.



The disclosure came one week after Chief Executive Officer Bernie Ebbers told investors that WorldCom's finances were sound.





And I suppose if, rather than terminating the employment of these blatant thieves on the spot, WorldCom had suggested there was an “error” or some “accounting abnormality” on the books to account for these indiscretions, the market would have held firm?

So many reporters out there seem to really hate money, to such an extent that they’ll even attack companies who try to keep their houses clean -- provided they’re big enough to poke a stick at.

Dan