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Saturday, Oct. 3, 1998
Market rebounds 152 points
Dow's climb reclaims some of week's losses
By BRUCE MEYERSON
Associated PressNEW YORK -- Blue-chip stocks rebounded Friday, wiping out a third straight day of heavy losses just as the market was returning to the summer's lows.
The Dow Jones industrial average, which had lost 450 points the prior two days, erased an early 102-point deficit and rose 152.16, or 2 percent, to 7,784.69 by the close.
Broader stock indexes also rebounded after two days of steep losses attributed to disappointment over the Federal Reserve's cautious response to the global economic crisis.
``The panic selling has pretty much washed itself out,'' said Jeffrey Applegate, chief investment strategist at Lehman Brothers, noting that the market's slide had even hit those sectors that are less dependent on the health of the economy. ``Everything that could be taken out and shot has been taken out and shot. So we set ourselves up for a bounce.''
Technology and smaller-company stocks continued to struggle however, with the Nasdaq composite index rising just 2.65 to 1,614.98 after shedding nearly 122 points on Wednesday and Thursday.
The morning drop pushed the Dow as low as 7,530, slightly below where it stood after the 512-point plunge of Aug. 31.
The Dow's rebound trimmed the week's loss to 244.08, but still left it 123 points below 1998's starting level and 1,550 points below the July 17 record of 9,337.97.
Stocks fell into a tailspin Wednesday amid mounting fears that Tuesday's interest rate cut by the Fed wasn't big enough to offset the economic deterioration crippling Asia and Russia and threatening Latin America.
Then, kindling fears that none of the world's major powers will take an active enough role in fighting the crisis, the German central bank left its rates unchanged at a regular strategy meeting Thursday.
Notably, even President Clinton felt the need to address that concern Friday, asserting that the United States has a heavy responsibility to lead the world ``back away from this financial precipice.''
Calling anew on Congress to provide full funding for the International Monetary Fund, Clinton said Treasury Secretary Robert Rubin and Federal Reserve Chairman Alan Greenspan would explore steps with allies to design new IMF programs ``to help countries ward off global financial contagion.''
Meanwhile, in the latest sign that the financial mess overseas is weakening the U.S. economy, the Labor Department reported Friday morning that unemployment edged higher in September as job creation slowed.
The unemployment rate of 4.6 percent in September compared with 4.5 percent during the three previous months and a 28-year low of 4.3 percent in April and May. The report also showed that employers added only 69,000 jobs to their payrolls last month, the smallest tally since the Northeast blizzard of January 1996.
``Today's employment number tells you that this wasn't the last Fed (rate cut),'' said Applegate, echoing the sentiment of many analysts who view Tuesday's Fed action as the first of several.
European stocks fell sharply again Friday as the chairman resigned at UBS, the Swiss bank that has said it will lose $1.6 billion due to its involvement in Long-Term Capital Management, the giant hedge fund that nearly collapsed last week and threatened to rattle markets around the world.
Financial stocks helped lead Friday's rebound after tumbling in recent days amid worries about their exposure to foreign markets and vulnerability to other hedge funds.
Travelers Group rose 2 13/16 to 38 9/16 and J.P. Morgan rose 2 to 83 to help lead the Dow, which also drew a boost from Chevron, up 3 to 87, and Procter & Gamble, up 3 13/16 to 74 15/16.
In other trading Friday, the Standard & Poor's 500 rose 16.21 to 1,002.60 to halt a two-day 62-point slide.
Advancing issues outnumbered decliners by a 4-to-3 margin on the New York Stock Exchange, but Nasdaq decliners finished the session with a narrow lead.
NYSE composite volume totaled 1.061 billion shares, up slightly from 1.047 billion on Thursday. The NYSE composite index rose 7.94 to 498.16.
Among smaller-company measures, the Russell 2000 index of smaller companies fell 0.33 to 349.71, and the American Stock Exchange composite index rose just 0.97 to 609.47.
In Tokyo, the Nikkei stock average rose 0.2 percent from Thursday's 12-year low. In an encouraging development after that market closed, the lower house of Japan's parliament passed some bills that would use taxpayer money to clean up the banking sector's bad loan problems. The move is widely viewed as a crucial first step toward economic recovery in Japan and Southeast Asia.
In Europe, Frankfurt's DAX index fell 6.2 percent and London's FT-SE 100 fell 3.2 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