Wall St tumbles on fears of global turmoil fallout
"$3.75B LTCM bailout and the FED is involved !!! "
By Huw Jones
NEW YORK, Sept 24 (Reuters) - U.S. stocks tumbled Thursday after the New York Fed and banks stepped in to bail out a hedge fund, sending a chill down Wall Street, and leaving investors to wonder who will be the next victim of global turmoil.
''That was a wake-up call, unfortunately,'' said Arthur Hogan, chief market analyst at Jefferies & Co.
''It took some of the euphoria of monetary policy easing in the near term out of the market.''
The Dow Jones Industrial Average ended unofficially off 152.42 points, or 1.87 percent, at 8001.99.
The rout erased much of Wednesday's 257 point gain in the Dow when Federal Reserve chief Alan Greenspan stoked hopes that interest rates might be cut soon, perhaps as early as the next Federal Open Market Committee meeting on September 29.
Hogan said investors were also a little unnerved by news that the House of Representatives Judiciary Committee will vote on Oct. 5 or 6 on whether to launch a formal impeachment inquiry into the charges against President Bill Clinton that were listed in independent counsel Kenneth Starr's report.
On the New York Stock Exchange, declining issues led advances by 2-to-1 on brisk volume of 804 million shares.
The Nasdaq shed 39.93 points to close at 1720.34.
The Standard & Poor's 500 stock index fell 23.37 points to end at 1042.72.
Despite strong overnight gains in Asian and European stocks following Wall Street's rally on Wednesday, U.S. stocks fell early on profit-taking, the slide gathering pace as investors digested details of the multi-billion dollar bail out of hedge fund Long-Term Capital Management LP.
Fifteen U.S. and foreign banks are taking an equity stake in LTCM, committing $3.75 billion over three years. The New York Federal Reserve also played a role in the rescue. |
