To: Night Writer who wrote (1409 ) 7/19/2002 6:31:55 PM From: Elwood P. Dowd Respond to of 4345 Friday July 19, 6:24 pm Eastern Time Reuters Market News White House says US economic fundamentals strong (adds U.S. Treasury comments in paragraphs 9-10) WASHINGTON, July 19 (Reuters) - The White House said on Friday it still believes the fundamentals of the U.S. economy remain strong despite a steep fall in stock prices. ADVERTISEMENT "The president knows that the fundamentals of the economy are strong," White House spokeswoman Claire Buchan said. The administration's latest comments came as U.S. stocks fell sharply with the Dow Jones Industrial Average skidding 390 points, or 4.64 percent, to 8,019.26 -- the seventh-largest point decline ever and the lowest close since October 1998. "The focus here is on the economy and the economic fundamentals," Buchan told Reuters. "We are working with Congress to enact policies to strengthen the economy, but the fundamentals are strong." The latest stock market fall was driven by an ongoing raft of bad news from leading corporations, including a forecast of a loss ahead for technology-leader Sun Microsystems Inc. (NasdaqNM:SUNW - News) and a federal probe of Johnson & Johnson (NYSE:JNJ - News). For the week, the Dow dropped 7.7 percent, the S&P 500 lost 8 percent and the technology-laden Nasdaq index gave up 4 percent of its value. Economists, many now downgrading their forecasts for U.S. economic growth, are growing increasingly concerned that the tumbling U.S. stock market could take a toll on consumer psychology. The stock market -- battered by disclosure after disclosure of corporate accounting fraud -- has failed to draw solace from a recent string of economic data that has indicated that the world's richest economy is still expanding, albeit at a modest pace. Although the data are pointing to recovery, Wall Street's malaise threatens to put a damper on the spending and investment that are needed to fuel a solid economic rebound. Separately, U.S. Treasury spokeswoman Michele Davis said that the President's Working Group on Financial Markets, an informal group including representatives of the Treasury, the Federal Reserve, the Securities and Exchange Commission and the Commodities Futures Trading Commission, had not met in the past two weeks to discuss the stock market fall. Davis told reporters there were no plans for the group to meet on market gyrations soon. The group has met this year to discuss proposals for corporate governance reforms. Email this story - Most-emailed articles - Most-viewed articles