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To: Don S.Boller who wrote (13320)	8/4/1998 7:59:00 PM
From: 2brasil	Respond to of 152472

OT ---------Wall St reels as big caps succumb to market woes By Huw Jones NEW YORK, Aug 4 (Reuters) - Wall Street got a bloody nose Tuesday as big caps finally succumbed to the slew of worries that have dented the broader market for some time. The Dow whipsawed deep into negative territory before closing unofficially off 299.43 points, or 3.41 percent, at 8487.31. It was the Dow's weakest close since 8445.08 on March 5 and its third biggest one-day points loss. ''People are concerned about profits and about Asia and how long that will remain a problem,'' said Charlie Crane, chief market strategist at Key Asset Management. Trading on the New York Stock Exchange was the third heaviest ever with 834 million shares changing hands. Declining issues thrashed advances by a five-to-one margin. ''It looked relatively orderly, not totally unexpected, and acting pretty much according to the rules,'' said Philip Rettew, senior market analyst at Merrill Lynch. ''I suspect the Dow is pulling back after a lot of weakness in the broader part of the market for a long time,'' Rettew added. The Nasdaq suffered its second biggest single day points loss, tumbling 65.41 points, or 3.53 percent, to 1785.69. It was the Nasdaq's weakest close since June 18. The broader market Standard & Poor's 500-stock index slid 40.29 points, or 3.62 percent, to 1072.15. ''I would not trust rallies for a while until the market regroups,'' Rettew said. ''A lot will depend on how people respond to it. If a fair amount of fear is generated, the market will obviously turn around.'' Analysts said there was no fresh news behind the sharp slide as investors see the chances of a second half rebound in profits rapidly being flattened by Asia's financial tornado while the U.S. economy also slows. The White House scandal also hangs over the market. Confidence was also pricked by one of Wall Street's biggest bulls turning bearish. Ralph Acampora, Prudential Securities' director of technical research forecast a 15-20 percent pullback in the Dow from its July 17 record close of 9337.97, which would push the blue chip index down to between 7470 and 7937. Acampora said there is now only a 50/50 chance of the Dow hitting the magic 10,000 level by the year end. A sharp pullback had been forecast by many analysts as the market's technical health deteriorated in recent weeks. Declining issues have led advances in most sessions in the past three weeks, while the Dow, the Nasdaq and S&P500 all defied gravity to make record highs on the back of strength in just a few stocks. ''Eventually, the average stock tends to drag down the big stocks,'' said Frank Gretz, market analyst at Shields & Co. ''Big stocks are having a catch-up move on the downside.'' Investors are moving into safer-havens such as cash and bonds until the dust settles and a clearer picture emerges. ''Some money is skipping from one stock to another, but I suspect it may be sitting in cash for a while,'' Rettew said. Fidelity Investments, the biggest U.S. fund group with $626 billion under management, said there was a slight net outflow of money from stock mutual funds and a slight inflow into cash and bonds Tuesday. The benchmark 30-year Treasury bond rose 6/32 to yield 5.65 percent. Year-on-year corporate earnings growth in the second quarter will turn out to be no better than the 3.8 percent increase in the first, according to First Call. Analysts are already scrambling to trim their third and fourth quarter earnings forecasts. The big technology stocks and financials, two of the market's best leaders and seen vulnerable to Asia's woes and a U.S. economic slowdown, were hammered. International Business Machines Corp. (IBM - news) slid 5-15/16 to 126-13/16. Chase Manhattan Bank Corp. (CMB - news) fell 5-3/16 to 69-5/8. All the blue chips tumbled except Procter & Gamble Co. (PG - news), which gained 1-1/2 to end at 77-3/4, snapping a three- session run of losses about trimming its profit outlook late last week. Even drug shares, a safe-haven in recent weeks, tumbled. Warner-Lambert fell 6-5/16 to 69-1/8. AlliedSignal (ALD - news) offered to buy AMP Incorporated (AMP - news) for $44.50 per share or $9.8 billion. AlliedSignal fell 3-9/16 to 40. AMP skyrocketed 13-15/16 to 42-9/16. The Dow's biggest single day points loss was 554.26 on Oct. 27 last year. On the following day, small investors stepped in to buy, prompting a 337 point rebound. ''You have billions of dollars pouring into mutual funds everyday. This is a long way off from being a problem,'' said Andrew Johnson, who was checking his investments at a Charles Schwab outlet in Manhattan's