Reporter levy....if this is the case, NOW I'm really wondering how many times this could have happened across the country.... And on top of that, I will say again, perhaps we should have a recount (NOT revote) but a recount in every single state in the country! Do we think there might be some noticable differences in any states, and the ones with large electoral counts in particular???? My guess is YES! Keep up the reports...By the way, when do the mail in votes get counted....and also, has anyone asked each military person if they got their mail in vote on time, and if they were able to send it on time? Wonder where the national press is on this?? Also am sending this here...for the record....Inquiring minds want to know KLP
>http://www.latimes.com/cgi-bin/print.cgi
Saturday, November 11, 2000
Dow, Nasdaq Plunge Over Fears on Economy, Profits
Stocks: Technology shares hit lowest levels since the end of 1999. Election turmoil rattles Wall Street.
By THOMAS S. MULLIGAN, Times Staff Writer
NEW YORK--Deepening fears over flagging corporate profits and a weakening economy sparked a sell-off that drove technology stocks Friday to their lowest levels in more than a year.
The tech-heavy Nasdaq composite index plummeted 171.36 points, or 5.4%, to 3,028.99, its lowest close since Nov. 3, 1999, and a shocking 40% below its March record high.
Blue-chip shares also fell sharply. The Dow Jones industrials sank 231.30 points, or 2.1%, to 10,602.95. Only six of the 30 Dow stocks managed gains.
Analysts said the legal challenges to the presidential election vote had rattled Wall Street, in part because many investors had been betting on a Republican victory and a business-friendlier White House.
But the latest selling wave in beaten-down technology stocks--completely reversing Nasdaq's amazing surge from just under 3,000 at the end of October 1999 to more than 5,000 in March--stems largely from investors' worsening perception of the tech industry's growth prospects, experts say.
Indeed, many analysts warn that investors who are counting on a fast rebound in tech shares may be disappointed because the environment has changed so dramatically from a year ago.
Last year and early this year, tech companies across the board boasted accelerating revenues and profits, and investor sentiment over the promise of the Internet and other new technologies was approaching euphoria.
But now, every day brings new warnings that the tech industry's sales and profit growth in the year ahead will be slower than expected.
On Friday, shares of personal computer maker Dell Computer plunged $5.38 to $23, near a two-year low, as investors focused on the company's projection that sales growth in 2001 will slow to about 20%, down from the 30% rate it had previously expected.
Other tech giants slumped with Dell. IBM was the Dow's biggest loser, down $6.44 to $93 on the New York Stock Exchange. Chipmaker Intel dropped $4.38 to $37, leaving it down 50% from its Aug. 31 peak. PC rival Hewlett-Packard slid $3.81 to $39.13.
Overall, falling stocks outnumbered winners by nearly 3 to 1 on Nasdaq, though trading volume was moderate Friday.
Meanwhile, in the once red-hot Internet sector, corporate casualties continue to mount. This week Pets.com became the latest Net-based firm to pull the plug on its operations after failing to find a buyer. The company's stock, which had traded as high as $14, now is worth 25 cents a share.
Because technology shares had risen to extraordinary heights in the spring, they were vulnerable to any sign of slowing growth, analysts note. But now, even with many of the stocks already far below their peak levels, many investors continue to bail out.
Nasdaq Below 3,000 Seen as Worrisome
Analysts fear that the mood, already dark, could turn black if the Nasdaq index drops below the 3,000 mark next week.
"It's a little worrisome," said Todd Gold, technical strategist at Gruntal & Co. "Our brokers are hearing a lot of pain from their retail customers."
Yet the stock market overall, while off sharply this week, is faring far better than Nasdaq, analysts note. The Dow and the Standard & Poor's 500-stock index, less dominated by tech stocks, are down only about 10% from their 2000 peaks reached earlier this year, despite concerns about the slowing economy.
Charles Blood, market analyst at Brown Bros. Harriman, expects the broad market indexes to make new highs in the months ahead, because he believes investors will continue to pour money into recent market leaders like financial service stocks and such "defensive" growth stocks as drugs and health maintenance organizations.
However, a key element of Blood's scenario is that the Federal Reserve Board will begin to ease interest rates in 2001, reversing the course it set in the summer of 1999 when it began to tighten credit to slow the zooming economy.
A first step would be for the Fed, in its meeting next Wednesday, to announce that it is stepping back from its inflation alert and adopting a "neutral" stance on rates.
But many analysts believe the Fed is unlikely to announce any change in its stance so soon after an election, for fear of appearing political.
Blood, however, noted that the identity of the next president may still be unknown by Wednesday, so the Fed could hardly be accused of taking sides. Moreover, there is precedent for the central bank to take action shortly after an election.
"It's remarkable how many times the Fed gets clarity [on the economy] in November and December that it lacked in October," Blood said.
A potentially sticky issue for the Fed is that the stock market's slide could worsen significantly early in the week, driving the Nasdaq index below 3,000. In effect, investors could be begging the Fed for some good news on interest rates.
Gruntal's Gold thinks that is likely to happen because of the change in market psychology.
"Back in January and February, anything that was said was spun by the market in a positive light," he said. "Now, all news is bad news."
Many investors may finally have had their "buy-on-the-dips" mind-set beaten out of them, Gold said.
After crashing in spring, tech stocks rebounded strongly into mid-July. They fell again in late July, then came right back in August.
But starting in early September the Nasdaq index began to dive again, as profit warnings from key tech companies multiplied. The slide deepened in October, and several rally attempts have fizzled in recent weeks.
Each time the market slides anew, there are fewer people with the money or the desire to jump back in, Gold said.
November and December traditionally have been strong months for the stock market, but this year there are some unexpected obstacles--chief among them the unresolved election.
"There's a risk of opening a Pandora's box, where they start challenging election results all over the country," said Subodh Kumar, chief investment strategist at CIBC World Markets.
A protracted election fight could snuff out any year-end rally that gets started, he and other analysts said.
Another concern is a possible wave of tax-related selling by individual investors toward the end of the year.
Investors who incurred capital-gains tax liabilities early in the year by cashing in stocks at a profit might now want to balance things out by selling their losers.
Mutual funds, which generally operate on a November-through-October tax year, helped drag down the market last month with tax selling of their own. But many individual investors tend not to do tax selling until November and December.
Copyright 2000 Los Angeles Times |
