NEW YORK (CNN/Money) - U.S. stock tumbled to 10-week lows Tuesday after Tyco International sparked worries that more companies will downwardly restate financial results the way Enron did before going bankrupt.
Confidence in accounting accuracy has tumbled with the stock market, which hasn't had a winning year since 1999.
The Dow Jones industrial average fell 247.51 points, or 2.51 percent, to 9,618.24, its lowest finish since Nov 12. The Standard & Poor's 500 index shed 32.42, or 2.6 percent, to 1,100.64, its worst close since Nov. 2, while the Nasdaq composite index tumbled 50.93, or 2.8 percent, to 1,892.98. That was its lowest close since falling to a 10-week low on Jan. 22.
In the latest casualty, shares of Tyco, the diversified conglomerate facing bookkeeping questions, tumbled 20 percent. Williams Cos. fared even worse, shedding 22 percent when the energy trader and pipeline operator delayed release of its full fourth-quarter earnings report.
And PNC Financial Services Group said it will restate results for 2001 downward by $155 million, shaving 9 percent off its stock.
"Any company out there that has some accounting concerns, either real or imagined, is getting hit today," said David Briggs, head equity trader at Federated Investors. "There's fear out there that maybe Enron was just the tip of the iceberg."
Tuesday's selloff comes as the recent bankruptcies of Enron, Kmart and Global Crossing have unnerved investors.
"No one wants to be long the next Enron," Patrick Boyle, trader at Credit Suisse First Boston, told CNNfn's Street Sweep. "The market's very nervous."
That nervousness helped the Treasury market snap a week-long losing streak as investors took refuge in fixed-income securities
The losses also kept the Federal Reserve in the background. Central bank policy makers meeting in Washington are expected to leave interest rates unchanged when they adjourn Wednesday.
More stocks fell than rose. On the New York Stock Exchange, losing shares topped winning ones by more than 2-to-1 as 1.7 billion shares traded. Nasdaq decliners also topped gainers by more than 2-to-1 as 1.8 billion stocks changed hands.
In the currency markets, the dollar fell against the euro and yen.
Tyco tumbles
With the Enron scandal fresh, suggestions of financial problems can devastate stocks. Tyco (TYC: down $8.35 to $33.65, Research, Estimates), which began the year at $58.90, has lost 43 percent of its value even though the acquisition-hungry company has not restated financial results.
"It's Enron-itis," Art Cashin, head of floor operations at UBS Warburg, told CNNfn's Halftime Report.
In a proxy filing, Tyco said it made a multimillion-dollar payout to an outside director for arranging the conglomerate's acquisition of a company in which the director held stock.
CEO Dennis Kozlowski called the selloff in Tyco shares "unjustified."
"Clearly we are in an environment where people are intensely skeptical of corporate America, and for that matter, Tyco," Kozlowski said in a statement. "As we have said before, we are prepared to openly discuss whatever legitimate questions or concerns our shareholders, the analyst community or the media may have."
Tyco earlier this year said it would split its businesses in four publicly traded units -- a move partially designed to open its books to more scrutiny. But the move hasn't helped its shares, more than 169 million of which traded Tuesday.
Losses spread to another conglomerate, General Electric Co. (GE: down $1.69 to $36.46, Research, Estimates).
"Any conglomerate is going to come under question," Barry Hyman, chief investment strategist at Ehrenkrantz King Nussbaum, told CNNfn's Market Call.
NYSE's biggest loser, Williams Cos. (WMB: down $5.36 to $18.78, Research, Estimates), said it delayed the release of its quarterly report to assess its obligations related to its spinoff of Williams Communications.
In the PNC Financial (PNC: down $5.79 to $56.08, Research, Estimates) news, the company said the restated results comply with a regulatory request that it consolidate three outside interests.
IBM (IBM: Research, Estimates) also tumbled after naming Sam Palmisano as chief executive to succeed Lou Gerstner, who saw the technology company though a strong run since taking over in 1993.
Several stocks fell in heavy trading amid no apparent news, including WorldCom (WCOM: down $1.60 to $10.40, Research, Estimates) and Cendant (CD: down $1.83 to $16.52, Research, Estimates).
WorldCom and Standard & Poor's disputed rumors that its stock will be yanked from the S&P 500 of large companies.
Cendant, a real estate and travel company, issued a statement saying it is not aware of any forthcoming negative media story that is apparently hammering its stock.
The Dow's biggest gainer, Merck (MRK: up $0.52 to $57.52, Research, Estimates), said it plans to spin off Merck-Medco, its pharmacy benefits unit, as a separate publicly traded company this year.
And shares of Texas Instruments (TXN: up $1.59 to $29.96, Research, Estimates) rose after the chipmaker lost less money than analysts expected in its fourth quarter and said sales should top forecasts going forward.
Awaiting the Fed decision
After cutting interest rates 11 times last year, the Fed's actions may be paying off. An index measuring consumer confidence rose to 97.3 in January, well above forecasts, from December's 94.6.
The Tuesday report from the Conference Board followed government data showing that orders for long-lasting items rose 2 percent last month, topping forecasts, in the latest sign that the worst of the manufacturing slump has passed.
Cheaper money has helped the housing market, which set sales records last year. The pace of job cuts has slowed and the manufacturing sector has shown signs of life.
Economists Wednesday will listen to what the Fed says about the economic outlook a week after Chairman Alan Greenspan said he saw improvement but questioned the speed and timing of any recovery.
In the bond market, investors have been demanding higher yields, anticipating the first interest hike by the Fed. But the stock market is less sure about recovery. The major indexes have made no progress in 2002 after declining over the prior two years. The Dow industrials are off 4 percent in 2002, while the Nasdaq is off 3 percent.
The economy, meanwhile, will get plenty of attention when President Bush delivers his State of the Union address to Congress later Tuesday.
This weeks marks the last bust period for December quarter results. In Tuesday's numbers, Coca-Cola (KO: down $1.21 to $44.00, Research, Estimates) said its fourth-quarter profit matched forecasts and the soft-drink maker said it anticipates 2002 earnings to grow at previous expectations of 11 percent-to-12 percent.
Honeywell International (HON: down $1.15 to $30.90, Research, Estimates) said fourth-quarter profit fell to 55 cents a share, in line with expectations, from 70 cents a year earlier. 
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