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STOCKS SLUMP TODAY AS MICROSOFT EARNINGS DISAPPOINT SOME INVESTORS

Disappointing earnings from Microsoft Corp. and Amazon.com Inc. weighed heavily on stocks at midday today as nervous investors hedged against a possible slowdown in profit growth through the rest of the year.

Dow component Microsoft issued earnings late Thursday that were a penny short of Wall Street estimates -- a rare miss that unnerved investors. Earnings per share for the company's new fiscal year were also adjusted downward due to the company's recently announced dividends.

"Expectations were very high and the Street is clearly disappointed these companies didn't beat expectations," said Steve Neimeth, who manages the $340 million SunAmerica Growth and Income Fund in Jersey City, New Jersey.

And, with consumer spending lessening recently, online retailer Amazon.com's earnings also caused additional worry. With the company missing both earnings and revenue targets for the quarter, investors worried that the recent spending slowdown could presage an overall economic slump.

At 1 p.m., the Dow Jones industrial average fell 51.02, or 0.51 percent, to 9,999.31.

Broader stock indicators were lower. The Standard & Poor's 500 index was down 6.89, or 0.63 percent, at 1,089.95, and the Nasdaq composite index dropped 27.53, or 1.46 percent, to 1,861.53.

S&P 500 companies increased earnings 23.8 percent in the second quarter after a 27.5 percent jump in the first, according to analysts surveyed by Thomson Financial. They predict growth will ease to 14.9 percent this period.

"We know coming into the second half of this year, we would probably see an earnings slowdown," said Jeffrey Swensen, head trader at Batterymarch Financial Management, which oversees $12 billion in assets in Boston.

Days after announcing a $75 billion dividend and stock buyback plan, Microsoft slipped 82 cents to $28.18 in its first trading session after earnings were announced. Amazon.com plunged $5.07, or 11 percent, to $40.75 on its disappointing report.

Oilfield services company Halliburton Co. fell 27 cents to $30.77 after it posted a loss for the quarter due to charges related to discontinued operations and asbestos-related litigation. Middle Eastern contracts pushed revenue higher, however, and the company beat estimates by a penny.

The Coca-Cola Co. slumped $3.70 to $45.27 despite beating Wall Street expectations by a penny. The soft drink maker said its international businesses were coming under increasing competition.

Electronic Arts, the largest U.S. video game maker, dropped $3.50 to $49.15. The company said sales won't rise in the three months through December, when it typically gets about half of its annual revenue.

Maytag fell $2.62 to $18.66. The No. 3 U.S. appliance maker slashed its annual profit forecast by as much as 81 percent because of falling sales.

Xerox was up 34 cents at $13.65.

Paccar Inc. rose $1.55 to $55.98. The world's third- largest truck maker said net income in the second quarter increased to $1.34 a share.

Declining issues outnumbered advancers by more than 2 to 1 on the New York Stock Exchange, where volume came to 690.57 million shares, compared with 936 million at the same point on Thursday.

The Russell 2000 index of smaller companies was down 3.53, or 0.6 percent, at 542.99.

Overseas, Japan's Nikkei stock average fell 0.9 percent. In afternoon trading, Britain's FTSE 100 closed up 0.5 percent, while France's CAC-40 dropped 0.2 percent for the session and Germany's DAX index fell 0.1 percent in late trading.

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