Money Mail from CNBC
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Good evening Jim,
Here is your Money Mail for Friday, April 14.
THE BUZZ AT THE BELL
When the Nasdaq closed down 357 points today, it was
putting the finishing touches on the worst week in its
history. Overall, it fell 1126 points in five days (25%) and
lost roughly $2 trillion in value. The Dow fared little
better: It lost 616 points today - its biggest-ever,
one-day fall - and is down 7% for the week.
You're going to hear that the Consumer Price Index ignited
the selloff. Prices rose 0.7% in March (compared with
estimates of 0.5%), and this, higher-than-expected,
inflationary pressure is sure to revive talk that the Fed
will increase short-term interest rates another 0.5% at
its May 16 meeting. But if markets were inclined to rise,
there was plenty of good news on the earnings front to
spark a rise. Sun Microsystems, for instance, reported an
earnings increase of 49%, 3 cents a share higher than the
consensus estimate. As a result, Sun was one of the few
stocks to gain on this bloody day, but it wasn't enough to
save others. No, inflation is not the problem. This is a
fundamental correction of the recent, euphoric,
momentum-driven, bull market. Plan accordingly. The last
time the Nasdaq lost 30%, (in 1983-84), it took 18 months
to recover.
P.S. Today's winners? An ancient refuge: gold. Shares of
Barrick Gold rose 7%, and Placer Dome was up 13%. |
