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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: zsteve who wrote (23190)	8/21/1998 1:05:00 PM
From: zsteve	Read Replies (1) \| Respond to of 70976

Global Upheaval Hammers Stocks And Buoys Bonds By TERRI CULLEN Stocks skidded Friday as political and economic turmoil overseas sparked a stampede to the safe haven of U.S. Treasurys. The dollar rose against the yen but remained steady against the mark. The Dow Jones Industrial Average was down 246 points to 8365 in midday trading after dropping 283 points at its low. The industrials slumped 81.87, or 0.94%, Thursday. The broad Standard & Poor's 500-stock index retreated 31.60 to 1060 and the New York Stock Exchange Composite Index lost 15.80 to 530.40. Investors continued to abandon smaller issues amid the volatility. The Nasdaq Composite Index, heavily weighted with technology and small-capitalization stocks, tumbled 63.30 to 1769.20, while the Russell 2000 small-stock index dropped 11.60 to 390.10. Investors were badly shaken by torrent of troubling news from around the world, including talk of a banking crisis in Russia, another high-profile bankruptcy in Japan, uncertainty about the stability of Venezuela's currency, and Thursday's decision by President Clinton to launch a series of military strikes against alleged terrorist targets in Sudan and Afghanistan. Friday's so-called double-witching, the monthly expiration of stock and stock-index options contracts, added to the volatility. Financial stocks were hammered once again as speculation surrounding Venezuela's currency, the bolivar, raised fears of an emerging market currency crisis. Although Venezuelan officials have denied any intention to devalue their currency, many worry that slumping oil prices and a widening fiscal deficit will force the country's government to devalue. In addition, Wall Street will have to deal with the fallout from Thursday's U.S. military air strikes. Sudanese demonstrators stormed the empty U.S. Embassy compound in Khartoum Thursday, while Pakistan said Friday that one of the missiles the U.S. aimed at neighboring Afghanistan Thursday landed on its soil, killing at least five people. "The market's got so much on its plate this morning and it's having a tough time digesting it all," said Michael Lyons, a senior trader at Morgan Stanley Dean Witter. "People don't want to stay long just in case something flares up over the weekend. There's a feeling that none of these problems are going to go away very soon, so everybody's just extremely nervous." Turmoil in the overseas markets sent investors flocking to the perceived safety of U.S. Treasurys. The bellwether 30-year bond rose nearly 1 3/4 points, pushing its yield to 5.39% -- its lowest level since the Treasury Department began regular 30-year bond auctions in February 1977. The long-bond yield is trading below the federal-funds interest rate, interest rate -- the level at which banks lend to each other overnight -- of 5.5%. Flight-to-quality buying also boosted the dollar, which climbed in early trading amid news that Japanese general trading company Okura & Co. filed for bankruptcy. Traders said fears of an impending currency intervention to support the yen were also subsiding. World-wide, stocks plummeted in dollar terms. The Dow Jones World Stock Index fell 5.65 to 177.89 as of noon EDT In major market action: Stocks plunged. On the Big Board, volume stood at 348 million shares, with 2,570 stocks declining and just 380 advancing. Bonds soared. The 30-year bellwether Treasury bond was up nearly 1 3/4 point, or $17.50 per $1,000 bond. Its yield, which moves in the opposite direction of its price, dropped to 5.39%. The dollar rose. It was at 1.7962 marks and 144.93 yen, compared with 1.7991 marks and 143.14 yen late Thursday in New York.