NEW YORK (CNNfn) - The Dow Jones industrial average tumbled nearly 100 points Thursday on concerns that the weak euro will hurt profits at many of the multinational firms comprising the index.
Procter & Gamble, Coca-Cola and Minnesota Mining & Manufacturing tumbled after two companies, McDonald's and Colgate-Palmolive, sparked fears that their European earnings will show surprising weakness when converted into strong U.S. dollars.
"It's going to have some impact," Chuck Hill, director of research at earnings tracker First Call Corp., said of the currency that has fallen more than 20 percent in its brief existence.
 But the Nasdaq composite index, which has fallen for most of September, edged higher. One of its biggest gainers, Oracle, rallied after Morgan Stanley Dean Witter upgraded the stock hours ahead of its quarterly earnings report. Two government reports, both suggesting inflation remains low enough to keep the Federal Reserve from raising interest rates, also boosted tech stocks.
"We still have a non-inflationary environment," said Charles Payne, head analyst at Wall Street Strategies, referring to the numbers on producer prices and retail sale. "I think this is more of an oversold bounce (for the Nasdaq). We'll see what kind of leg it has."
But blue chips got no bounce, with the Dow falling 94.71 points, or nearly 1 percent, to 11,087.47. The Nasdaq gained 19.90 to 3,913.79 while the S&P 500 fell 4.04 to 1,480.87.
Still, more stocks rose than fell. Advancing issues on the New York Stock Exchange topped declining ones 1,426 to 1,378, on trading volume of 1 billion shares. Nasdaq winners beat losers 2,220 to 1,727, as more than 1.6 billion shares changed hands.
In other markets, Treasury securities fell and the dollar climbed versus the yen. And while the U.S. currency weakened slightly against the euro, at 86 cents the 11-nation currency is still near its lifetime low.
Consumer products makers falter
The euro, which has stumbled for most of its short, 20-month lifespan, saw renewed focus Thursday after McDonald's (MCD: Research, Estimates), a Dow component, warned late Wednesday that the currency's weakness could hit 2000 earnings by as much as 7 cents a share. McDonald's, which declined sharply in after-hours trading Wednesday, fell 38 cents to $26.81 Thursday.
The fast-food firm is only the latest company to prepare analysts for lower-than-expected results. A rash of earnings warnings has sent stocks lower this month following big gains in August. Several have been euro-related.
Just Thursday, Deutsche Banc Alex. Brown said Colgate-Palmolive indicated that oil costs and a weak euro will hurt the company's third-quarter earnings by 5 cents per share. Deutsche Banc downgraded Colgate-Palmolive (CL: Research, Estimates), which plunged $8.94, or more than 15 percent, to $47.50.
 U.S. multinational firms doing business in Europe must convert those sales from euros to dollars. Euros buy fewer dollars than at almost any time since the young currency's inception, meaning less profit on an income statement.
Dow companies with exposure to Europe bore the brunt of selling Thursday.
Among them, Procter & Gamble (PG: Research, Estimates) fell 56 cents to $61.94, Coca-Cola (KO: Research, Estimates) lost $1.50 to $51, and 3M (MMM: Research, Estimates) dropped $1.88 to $84.63.
"It's all related, I think, to the news from Colgate-Palmolive," said Clark Yingst, market analyst at Prudential Securities. "It's (earnings) preview season, which is always treacherous."
Yingst said worries about rising oil prices, which increase costs for businesses and consumers, and high interest rates also are weighing on these stocks ahead of the closely watched June-September earnings reporting period, which begins next month.
Still, Gregg Hymowitz, president of EnTrust Capital, wondered why these fears emerged so recently given the euro's long slide.
"Now, if anything, you should be buying these stocks because if anything, (the weakness) is going to be reversing itself," Hymowitz told CNN's Street Sweep.
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Data are friendly
But some positive interest rate news emerged Thursday, after unexpected weakness in wholesale prices and retail sales lifted hopes that borrowing costs won't go higher in the months ahead.
In the week's first major economic indicators, the Producer Price Index fell 0.2 percent last month, countering expectations for a gain. Separately, a Commerce Department report said retail sales gained 0.2 percent in August, half the 0.4 percent increase forecast by analysts.
Mike Moran, economist at Daiwa Securities, called the PPI "a great inflation report." He said the retail sales figures mean consumer spending is slowing but still steady.
 Faced with a series of data like these, Wall Street has become less worried about the Federal Reserve raising interest rates. Thursday's numbers lifted hopes that the central bank, ever worried about climbing inflation, is done hiking borrowing costs this year.
Technology stocks, which tumbled most of September, and rose for most of the session, gave up their gains by session's end. Cisco Systems (CSCO: Research, Estimates) fell 6 cents to $61.25 and Intel (INTC: Research, Estimates) dropped $1.63 to $59.63.
David Elias, chief investment officer at Elias Asset Management, told CNNfn's Market Call that investors should buy tech on weakness. (197K WAV) (197K AIFF)
One company showing little weakness was Oracle (ORCL: Research, Estimates). Morgan Stanley Dean Witter upgraded the company to "strong buy" from "outperform," sending its stock up $3.13 to $84.94. After the close of trading Thursday, the maker of database software reported a fiscal first-quarter profit of 17 cents per share -- well above the 13 cents per share that Wall Street expected. 
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