STOCKS' TWIN WHAMMY; INTEREST RATES, FEARS OF 2ND QUARTER SOFTNESS TAKE TOLL ON MAJOR INDEXES.

Byline: Eileen Glanton Associated Press 

Stocks tumbled again under the burden of higher interest rates, but investors on Thursday found an added impetus for a selloff - scattered warnings of weakness in second-quarter earnings.

The Dow Jones industrial average fell 132.03 to close at 10,534.83, the fourth straight decline for the blue-chip index. The Dow has now lost 320 points since Monday, nearly wiping out a 365-point gain from last week.

Broader stock indicators also dropped. The Standard & Poor's 500 index fell 17.28 to 1,315.78, and the Nasdaq composite index lost 44.13 to close at 2,553.99.

Most analysts expect companies to report generally robust earnings after the second quarter ends next week. But amid concerns about the Federal Reserve's plans to raise interest rates to slow economic growth, some say the market has grown too fragile to withstand much bad news.

Semiconductor maker Advanced Micro Devices provided a solid dose late Wednesday when it said it expects a second-quarter loss far worse than analysts have anticipated. AMD said microprocessor prices have collapsed, and the company has lost market share to industry leader Intel. Thursday, the company's stock fell $1.125 to $17.0625.

Also late Wednesday, Micron Technology said it lost 10 cents a share in its fiscal third quarter. Analysts had expected the chip maker to break even. Micron's stock fell $4.5675 to $39.375.

The earnings weakness wasn't confined to technology companies. Goodyear, a component of the Dow, said Thursday its second-quarter profits will fall well below analysts' expectations. Its shares held up, however, slipping just 12.5 cents to $56.50.

The poor results and warnings helped deflate Wall Street's optimism that strong earnings could lure investors back into the market. Stocks have sputtered in the weeks since the Fed first indicated it might raise interest rates, and many analysts have looked to corporate earnings as a potential salvation.

Now, they aren't so sure.

``Second-quarter earnings still look like they'll be strong, but there won't be the stream of upside surprises that we got used to in the first quarter,'' said Brian Belski, chief investment strategist at George K. Baum & Co. in Kansas City, Mo.

The continuing slide of the bond market also pressured stocks. The 30-year Treasury bond yield rose as high as 6.17 percent, its highest level since November 1997. The rising yield of bonds has presented investors with an attractive alternative to stocks.

``Last week, a bond market rally helped stocks,'' Belski said. ``This week, that support is gone.''

Analysts also said last week's sentiment that the Fed will raise rates only a quarter of a percentage point has given way to a belief that Fed might raise rates higher or more than once.