MM, you believe it will go that low?
Mephisto
"Late Friday, Cisco Chief Executive John Chambers cited a better than a 50-50 chance that the slowdown in demand and capital spending by customers is going to be more than a six-month phenomenon.
That comment further shook people, said Graham Tanaka, president of Tanaka Growth Fund, which manages $200 million. ``In the past, you had corrections that might normally last only a couple of quarters,'' added Tanaka.
The Nasdaq now is down 61.9 percent from its March 2000 high as profit warnings mount in the flagging economy. That drop surpasses its drubbing of 59.9 percent during the 1973-74 prolonged bear market.
Adding to the sour mood, Ed Kerschner, UBS Warburg's chief portfolio strategist, cut his 2001 earnings outlook for companies in the Standard & Poor's 500 Index by 3.5 percent because of a drop in manufacturing activity and cuts in corporate spending.
Investors also fretted about the economic problems in Japan, which could have a ripple effect on global markets, said Waddell & Reed's Herrmann. Tokyo's benchmark Nikkei average (.N225) closed down 456.53 points or 3.62 percent at 12,171.37, the lowest close since April 1985.
There were also lingering worries the U.S. Federal Reserve may not be aggressive in cutting interest rates after recent economic data, like Friday's jobs and payroll figures, came in stronger than expected.
Bear Stearns chief economist Wayne Angell said the Fed will only cut interest rates by only half a percentage point at its next policy meeting March 20, adding that would still leave the U.S. central bank well behind the curve.
The U.S. central bank needs to lower the short-term borrowing cost by another full percentage point to stimulate the economy, Tanaka said.
``The New Economy is definitely in a recession. Now the danger is that if the Fed keeps its foot on the throat of monetary policy"
biz.yahoo.com |
