War continues to put damper on Wall Street

Capping a dreary first quarter, Wall Street suffered another sharp drop Monday amid fears of prolonged fighting in Iraq and a disappointing report on manufacturing in the Midwest. The Dow Jones industrials slid more than 150 points in the market’s fourth-straight declining session.

The Dow and Standard & Poor’s 500 index ended the first three months of 2003 with substantial losses, while the Nasdaq composite index, which had fallen the most in the bear market, eked out a modest gain. The month of March, however, turned out to be positive for all three indexes.

Analysts said investors remained concerned that the war would last for several months rather than a few weeks. Above, traders watch screens in front of a TV carrying the latest news from the war in Iraq on the floor at the New York Stock Exchange.

Investigation: HealthSouth fires chief, auditor Ernst & Young

HealthSouth Corp. fired Richard Scrushy as chairman and chief executive, severing ties with its founder as a third executive pleaded guilty Monday in a mushrooming accounting scandal.

The Birmingham, Ala.-based company said Scrushy, who built HealthSouth into a leading health care chain and was previously suspended as chief executive, also was asked to quit the board.

In a further bid to wipe clean its slate, HealthSouth said it would fire longtime outside auditor Ernst & Young.

The New York-based auditing firm said it was cooperating in a federal investigation of HealthSouth, which allegedly created false financial statements and accounting entries to deceive auditors.

Stocks: Fed probes purchases by Wachovia, First Union

Federal regulators are probing stock purchases by Wachovia Corp. and First Union Corp., focusing on trades that followed the April 2001 announcement of their merger, Wachovia said Monday.

Wachovia, which merged with First Union in September 2001, said the Securities and Exchange Commission was investigating purchases of the two companies’ common stocks between 1996 and 2001.

“Wachovia believes all purchases by the legacy companies were in compliance with law, and they were made in accordance with the advice of leading U.S. securities law firms,” the bank said in a statement.

Utility: El Paso reports losses

El Paso Corp. lost $1.7 billion in the fourth quarter and $1.47 billion for all of 2002 mostly because of its settlement of allegations it manipulated California’s natural gas market during an energy crisis and changes in how it accounted for long-term contracts.

The losses reported Monday amounted to $2.92 per share in the fourth quarter and $2.62 per share for the year. In 2001, the company earned $375 million, or 72 cents per share, for the quarter and $93 million, or 18 cents per share, for the year.