WSJ:
"The Dow industrials sank 114.31 to 8051.68 on Friday, their lowest level since Jan. 30, amid continued nervousness about Russia. The Nasdaq composite lost 46.60 to 1639.81, leaving the index 19% below its all-time high, just short of the level that would suggest a bear market for Nasdaq."
Industrials Falter As Worries Persist About Russia, Asia
By TERRI CULLEN INTERACTIVE JOURNAL
Stocks ended a volatile week with steep losses Friday as anxiety about
the troubled Russian and Asian economies prompted skittish investors
to raise cash. Bonds edged lower and the dollar traded mixed. The Dow
Jones Industrial Average slumped 114.31, or 1.4%, to 8051.68, bringing
its total loss in an extremely volatile week of trading to 514.93, or
6%. The industrials finished at their lowest level since Jan. 30, when
the average closed at 7906.50. The blue-chip average now is down 13.7%
from its July 17 high, putting it squarely into what Wall Street calls
a "correction," or a decline of 10% or more. The Standard & Poor's
500-stock index fell 14.64 to 1027.95 on Friday and the New York Stock
Exchange Composite Index dropped 6.70 to 512.12. Smaller issues also
suffered, with the Russell 200 index of small stocks down 7.55 to
358.55. Technology stocks posted the steepest losses, with the
tech-laden Nasdaq Composite Index tumbling 46.61, or about 2.76%, to
1639.81. The Nasdaq composite is now down 18.6% from its high of
2014.25 on July 20, just below the 20% level that indicates a bear
market. Tech shares, particularly volatile Internet stocks, stumbled
after a chorus of analysts Friday urged investors to stick with highly
liquid large-capitalization shares amid worries that economic
instability around the globe could depress corporate profits in the
U.S. Among the most widely held Internet issues, Amazon.com skidded 13
7/16 to 105 57/64, America Online dropped 8 1/2 to 96 1/2, and Yahoo!
fell 8 to 83 1/16. "We've gotten to the point where even the techs
that have been hanging in there really well are feeling the pinch,"
said Greg Nie, technical analyst at Everen Securities Inc. "The
tentacles of this correction are reaching out even further and they're
catching up now with stocks that have very little exposure overseas."
While European equities managed to recover from steep early declines
Friday, elsewhere in the world the financial picture was bleak.
Russian markets remained paralyzed by the turmoil that erupted in the
Russian government this week. President Boris Yeltsin returned to
Moscow Friday amid news reports that his acting prime minister, Viktor
Chernomyrdin, had agreed to a reversal of free-market reforms as part
of a political compromise to keep Mr. Yeltsin in office. BankAmerica
and BankBoston were the latest U.S. banks to report losses as a result
of the economic turmoil in Russia. BankAmerica, the nation's
fifth-largest bank, said attributed about $220 million in
quarter-to-date trading losses to market volatility in Russia, while
BankBoston, the 17th largest, reported said only about $10 million of
its quarter-to-date loss is tied to Russia. BankAmerica's shares
slumped 4 1/4 to 69 1/2, while BankBoston lost 3 to 36. Meanwhile,
Asian equities markets came in for another pounding Friday, as
investors added worries about the fallout from Russia's financial
crisis to an ever-increasing list of troubling economic news buffeting
the region's emerging markets. "There's still a lot of hesitancy out
there given that there's no real resolution in the economic and
political problems in Russia and Asia. The only thing that's going to
shake us out of this rut is some concrete signs of stability
overseas," said Anthony Dwyer, market strategist at Ladenburg Thalmann
& Co.
Bonds remained tied to Wall Street's gyrations, moving in tandem with
trading in U.S. stocks. The long-bond's yield, which moves in the
opposite direction of the price, plunged to a new low Thursday in a
powerful flight-to-quality rally sparked by turmoil in the
international markets.
A report on U.S. personal income and spending had little impact on
trading. Consumer spending fell 0.2% last month, the first decline in
spending in more than two years. Income rose 0.5%, lifting the savings
rate to 0.8% after three months of steady declines. The dollar plunged
against the mark and crept higher against the yen, but traders noted
that the market's thin volume exaggerated price swings. The mark's
rally was partially attributed to market participants reacting
favorably to Mr. Yeltsin's vow Friday to stay in office and not
dissolve the Russian parliament. The Russian president addressed his
countrymen in a televised interview Friday. World-wide, stocks eased
in dollar terms. The Dow Jones World Stock Index was down 1.79 to
170.97 as of 4 p.m. EDT. In major market action: Stocks tumbled. On
the Big Board, volume totaled 838.7 million shares, with 2,171 stocks
declining and 921 advancing. Bonds slipped. The 30-year bellwether
Treasury bond was down less than 1/8 point, or $1.25 per $1,000 bond.
Its yield, which moves in the opposite direction of its price, stood
at 5.35%. The dollar was mixed. It was at 1.7582 marks and 141.92 yen,
compared with 1.7970 marks and 141.87 yen late Thursday in New York. |
