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Tuesday, March 14, 2000
Markets are hit by selloff
Tech-heavy Nasdaq closes down 141.29
By Eileen Glanton
Associated Press
NEW YORK - Stocks stumbled Monday in the wake of a widespread selloff abroad. Technology shares came under intense selling pressure following the dramatic rise in the sector in recent weeks.
The Nasdaq composite index fell 141.29, or 2.8 percent, to close at 4,907.33, its fourth-worst point drop in history. The damage was even more intense in the opening minutes of trading, when the index was down as much as 209.36 points, or 4.1 percent.
Analysts attributed the wave of selling to investors eager to lock in profits from the Nasdaq's sharp rise this year. The index, dominated by technology stocks, was up 24 percent as of Friday's close, and even after Monday's selloff is up 21 percent since the start of 2000.
Other market indicators fared better. The Dow Jones industrial average rose 18.31 to 9,947.13, having recovered from a loss of as much as 190.49 points, or 1.9 percent, in the early going.
The Standard & Poor's 500 fell 11.45 to 1,383.62 and the Russell 2000 index of smaller companies, which has also risen to new records in recent sessions, fell 13.67 to 590.14.
"We're seeing the reflection of investors' nervousness, but overall, the outlook remains strong," said John Shaughnessy, chief investment strategist at Advest Inc. of Hartford, Conn.
Stocks fell steeply at the opening bell, after financial markets in Asia and Europe dropped sharply.
Leading the decline was Japan's Nikkei stock average, which fell 2.8 percent after the Japanese government announced the economy shrank more than expected in the last quarter of 1999. It was the second consecutive quarterly decline of the gross domestic product, meaning the economy was technically back in recession.
Investors had hoped that an economic recovery in Japan would compensate for any slowdown in the United States in the coming years.
The downturn in Asian markets set off selling in Europe too. Britain's FT-SE 100 was down 1.5 percent, Germany's Xetra DAX index fell 3.5 percent and France's CAC-40 fell 2.7 percent.
European analysts also cited profit-taking, noting that high-flying media, telecommunications and technology shares were most severely affected.
On Wall Street, technology shares that have performed the best this year were falling. Qualcomm fell 5 to 130, Oracle fell 2 to 78 and 3Com lost 4 to 64.
"There was a lot of chatter over the weekend on the Wall Street (television) shows about the impending doom of the Nasdaq," said Brian G. Belski, chief investment strategist at George K. Baum & Co., in Kansas City, Mo. "The market by virtue of its recent ascent, especially the Nasdaq, has set itself up for a bit of a correction."
A few high-profile technology stocks gained ground Monday. Intel rose 1 to 122 , helping the Dow contain its losses. Dell rose 3 to 54 in heavy Nasdaq trading after three Wall Street firms raised their ratings on the stock.
Among Dow components, J.P. Morgan rose 5 to 112.
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