Wonder if GoldmanSachs and some others, and the FED, are 'happy' yet??? All were concerned Jan-April 2000 about valuations and exuberance ... No need to worry about that now...
Dow Falls 186, Nasdaq Down 146
washingtonpost.com
By Amy Baldwin
AP Business Writer
Wednesday, Dec. 20, 2000; 2:22 p.m. EST
NEW YORK –– Fears about a harsh economic slowdown and
continuing
weakness in corporate earnings sent stocks sliding on Wall Street.
Disappointed that the Federal Reserve declined to lower interest rates
on
Tuesday and scared that the Fed has acknowledged the economy may
be
slowing too much and too fast, investors were dumping both high-tech
shares and blue chips.
The Dow Jones industrial average fell sharply, down 185.81 at
10,398.56
in afternoon trading.
The Nasdaq composite index was down 146.02 at 2,365.69 after falling
on Tuesday to its lowest level in more than a year. The tech-focused
Nasdaq is down about 38 percent so far this year and has fallen halfway
from its mid-March record close of 5,048.62.
The broader Standard and Poor's 500 index on Wednesday stumbled
31.00 to 1,274.60.
"We've actually had a crash over the last few weeks, not a one-day
crash," said Ricky Harrington, a technical analyst for Wachovia
Securities.
"I think we are getting close to a short-term bottom, the beginning of a
technical rebound."
Stocks have been heading lower since around Labor Day, as investors
have sold off stocks – mainly in the high-tech sector – based on fears
that
profits would be further pinched by an economic slowdown, high interest
rates and decreased consumer confidence. Meanwhile, a litany of
companies have warned that future earnings would indeed be
disappointing.
That means, "we are very close to a start of a spectacular January rally,"
Harrington said.
A rally early next year likely will be concentrated among tech stocks,
which have plummeted from premium prices, Harrington said. But blue
chips probably won't advance much, because investors have been
redirecting their tech investments into shares of popular consumer
brands,
drug makers and financial companies.
Another analyst predicted investors could abandon their Scrooge-like
way
of selling to bid stocks up later this week.
"The rally starts very soon. We are ridiculously oversold," said Larry
Rice,
chief investment officer at Josephthal & Co.
But other analysts believe the any upcoming rally will be a short rebound
and that the market will remain bearish through the first quarter.
Wednesday's high-tech losers included Cisco Systems, which skidded
$5.13 to $36.63 after Merrill Lynch cut its rating on the network
equipment maker.
Some of the Dow's losses came from computer makers
Hewlett-Packard
and IBM, which slumped after Merrill Lynch downgraded those stocks
as
well. Hewlett-Packard was down $1.44 at $29.88, and IBM fell $4.88
to
$85.25.
Retail stocks, battered by declining consumer confidence and a
lackluster
holiday shopping season, posted more losses. Despite faring better than
most competitors, Target was down 63 cents at $28.13. Best Buy
slipped
$1.50 to $23.63.
Investors also pulled back from some of the safer blue chips to which
they've been retreating recently. Financial stocks fell, with Citigroup
losing
$1.75 to trade at $48.50.
But drug makers gained ground with Merck climbing $2.63 to $94.13,
and Johnson & Johnson advancing $2.31 to $101.50.
The Commerce Department reported earlier that housing construction
rose 2.2 percent in November, the biggest jump in nine months. But
builders – like investors – are worried that a slowing economy will crimp
their business.
Declining issues outpaced advancers 17 to 7 on the New York Stock
Exchange where volume was 920.15 million shares, well ahead of the
800.89 million at the same hour Tuesday.
The Russell 2000 index, which tracks the performance of smaller
companies, fell 13.99 to 444.79.
––– |
