Sun, May 06, 2001 EDT
fundsnav.gif (2552 bytes)
account management
business home

Another Day, Another Bloodbath on The Street
   Fox Market Wire
  E-mail This Story

Markets closed after a roller-coaster trading day in the red, with the Dow dropping below the 10,000 mark for the first time since October. U.S. markets followed those overseas in a steep plunge as the prospect of a global economic crisis unnerved investors worldwide.

"You are in the vicious cycle now," said Gary Kaltbaum, a technical analyst for First Union Securities. "It's where we close bad, and then Japan has a bad night, and then the European markets open lower, and we follow them."

Within 15 minutes of the opening bell, the Dow Jones industrial average tumbled more than 330 points to fall below the psychologically important 10,000 level for the first time since October. The drop wiped out the average's 82-point gain Tuesday and compounded a 436-point slide on Monday.

The Dow bounced back for a while, but then sank even further, hitting a low of 9,925 at about 1:30.

At the market close, the Dow was at 9,973.46, down 317.34 from the open. The Russell 2000 index, which tracks the performance of smaller-company stocks, dropped 7.43 to 454.83.

The Nasdaq composite index fell nearly 80 points early, then rallied all the way back. But at market close, it was down again, down 42.68 to 1,972.10. The Standard & Poor's 500 index was down 30.95 to 1,166.71.

Investors were particularly unnerved by news from Japan on Tuesday, when the government admitted that the world's second-biggest economy is in a state of deflation.

Japan's Nikkei stock average closed up 0.2 percent on Wednesday after falling to a 16-year low Tuesday. Japan's economic problems were significant enough to turn investors' attention away from bleak profit outlooks for American companies, which have been propelling stocks downward since late last year.

Stocks fell hard in Europe, plummeting to 16-month lows. The markets in Paris, London and Frankfurt were each off upwards of 3.5 percent. The biggest losses came from technology and telecommunications stocks, which recoiled on the Nasdaq's instability.

Sellers have swarmed into the market, believing that the weakening economy won't recover in the near future. While the Federal Reserve has lowered interest rates twice this year and is widely expected to push rates lower again next week, the central bank's actions are not being viewed as aggressive enough to lift the economy out of its slump.

There was no safe haven in the Dow on Wednesday as every sector traded sharply lower. IBM slid $4.89 to $93.50, while Merck fell $1.62 to $71.31.

Tech losses were widespread, including Yahoo!, down 81 cents at $15.25, and Intel, off 63 cents at $28.75. The companies, along with Cisco, brought about the market's recent major tumble after warning late last week of poor business conditions.

Declining issues outnumbered advancers more than 3 to 1 on the New York Stock Exchange, where volume was 1.10 billion, compared with 1.06 billion at the same point Tuesday.

The Associated Press contributed to this report

More Marketwire More MarketWire News Top of Page

© 2000, News Digital Media, Inc. d/b/a Fox News Online
All rights reserved. Fox News is a registered trademark of 20th Century Fox Film Corp.
Data from Thomson Financial Interactive is subject to the following Privacy Statement
© 2000 Associated Press. All rights reserved.
This material may not be published, broadcast, rewritten, or redistributed.
© 2000 Reuters Ltd. All rights reserved