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Friday, Oct. 2, 1998
Dow loses 210 points as selloff continues
Investors worry interest rate cut can't stem crisis
By BRUCE MEYERSON
Associated PressNEW YORK - Stocks plunged again Thursday as global economic fears reached a new fever pitch, slicing more than 200 points off the Dow industrials for a second straight day and pushing Wall Street back toward the summer's lows.
The Dow Jones industrial average fell as much as 260 points before finishing with a loss of 210.09 at 7,632.53, a three-week low and less than 100 points above where the blue-chip barometer sat following the 512-point slide of Aug. 31.
Broader stock indicators also tumbled as investors dumped stocks in finance and technology, the two sectors that have been singled out just about every time worries about foreign economic turmoil flared up over the past year.
The two-session downturn has been fueled by worries that Tuesday's interest rate cut by the Federal Reserve wasn't big enough to counter the economic strain of the financial crisis crippling Asia and Russia and threatening Latin America.
The technology-heavy Nasdaq composite index sank nearly 5 percent, falling 81.51 to 1,612.33 after losing 40 points on Wednesday - a two-day loss of 6.9 percent. The Standard & Poor's 500 fell 30.63 to 986.38 on top of Wednesday's 32-point drop, losing 5.9 percent for the two sessions.
The Dow is now nearly 300 points, or 3.5 percent, below this year's break-even point of 7,908.25, and about 1,700 points, or 18.3 percent, below the July 17 record of 9,337.79 on July 17.
A 237-point slide on Wednesday left the Dow with a 12.4 percent loss for the third quarter, the worst quarterly performance in eight years.
Foreign markets also fell sharply Thursday, rattled by Wednesday's steep decline on Wall Street and frustrated by the German central bank's decision to leave its key lending rates unchanged and not to follow the Fed's lead.
Adding to the negative sentiment were some discouraging reports from the International Monetary Fund and Japan's central bank, as well as worries that last week's near-collapse of a major hedge fund, Long-Term Capital Management, might be the first of many bullets that the world's shaky financial system may have to dodge.
``There's a lot of fear out there without a question,'' said John Lynch, director of investment strategy at Interstate/Johnson Lane in Charlotte, N.C., noting that the disappointment with the Fed has overshadowed a drop in long-term lending rates to historic lows in the bond market.
After two days of panicky selling ``on the cusp of what should be good news, I'm wondering if investors are convinced there will be a recession,'' said Lynch.
Declining issues outnumbered advancers by a 3-to-1 margin on the New York Stock Exchange. Nasdaq decliners posted a 4-to-1 lead. NYSE composite volume totaled 1.047 billion shares, up from 962.40 million on Wednesday.
The NYSE composite index fell 14.25 to 490.22, and the American Stock Exchange composite index fell 12.50 to 608.50. The Russell 2000 index of smaller companies fell 33.55 to 350.04.
In Tokyo, the Nikkei stock average set another 12-year low Thursday, falling 1.6 percent as a new survey by Japan's central bank showed that confidence in the economy is deteriorating rapidly among Japanese businesses.
Confidence among small- and medium-sized businesses plunged to its worst level since the Bank of Japan began doing quarterly surveys in 1967. Business sentiment among major manufacturers fell to its lowest level in 3 years.
In Europe, Frankfurt's DAX index fell 5.5 percent, London's FT-SE 100 fell 3.1 percent, and Paris' CAC40 fell 5.0 percent.Post your comments about local news eventsFront Page || Main Index || News || Business || Texas || South Texas Outdoors || Birdwatching || Sports || Entertainment || Selena || Education || South Texas Attractions || World Wide Web