NEW YORK It was a bloody day on Wall Street Friday, as the Dow posted its biggest point loss ever and the Nasdaq took another massive beating, suffering its worst week ever.
|Stocks plummeted Friday after economic data indicated higher-than-expected inflation|
Stocks in nearly all sectors plummeted from stronger-than-expected inflation data that nearly assures a spike in interest rates.
The Dow Jones industrial average closed down a staggering 616.23 points, or 5.4 percent at 10,307.32, according to preliminary calculations. Already deep in bear-market territory, the technology-laden Nasdaq composite index shed another 355.68 points, or 10 percent to 3,321.10.
|The New York Stock Exchange|
Technology stocks simply were clobbered all week. The Nasdaq, home to many once high-flying computer, Internet and telecommunications shares, is down 25.5 percent or more than 1,000 points for the week, its biggest one-week percentage drop ever.
"It was crazy...it was insane," a broker said. "You are drenched with sweat and wearing a suit and you are running nonstop. All of us tell each other at the end of the day our chest hurts. Our back hurts. So much volume, so many phone calls makes it crazy nobody seems to feel like it is the end of the world, but people weren't running around buying a lot of stocks either."
Historic but Somber
Outside the New York Stock Exchange the mood was somber. Brokers exited the building silently, offering only shrugs when asked by a reporter to comment on the historic day.
An NYSE telephone clerk said those less experienced on the trading floor and less prepared to take a hit than their more seasoned colleagues would be affected most.
|Brokers leave the New York Stock Exchange.
"For the last six months momentum has been up, and it's great, but it goes the other way too," the clerk said.
Another employee of the exchange said he did not think Friday's collapse got the same reaction as when the Russian economy faltered two years ago.
"It's not like it was Trading Places in there," said one man, referring to the 1983 Eddie Murphy comedy about commodities trading.
But a clerk who works inside the stock exchange said people were panicking and throwing objects in anger.
One man who would identify himself only as Jeff said he was visiting the floor of the stock exchange Friday with a stockbroker friend.
"I won't forget it," he said of the calamity.
Week Started Off Well
Earlier in the week, the Dow seemed to resist the selling pressure in the tech sector, but as the week progressed, investors sold off the blue chips as well. The Dow is down 804 points or 7.2 percent for the week.
The already-shaken market was traumatized after the Labor Department reported that the core Consumer Price Index for March hit the highest level in more than five years.
|A trader signals offers in the NASDAQ 100 stock index futures pit
"I wouldn't even try to figure out how low it could go," said Larry Rice, chief investment officer at Josephthal Lyon & Ross of the Nasdaq. "The market got carried away to the extreme on the upside and now it is going to get carried away to the extreme on the downside. The Dow coming down does not surprise
me because it has been going up like a rocket ship in the past few weeks."
"The Nasdaq was rocky to begin with, and it didn't take much to upset the apple cart," said Peter Coolidge, senior equity trader at Brean Murray & Co.
Big Losers Were Stalwarts
Among the big losers on the Nasdaq were some of its stalwart names, such as software makers Microsoft Corp. and Oracle Corp.
Financial services stocks in the Dow suffered the most, with American Express Corp. and J.P.Morgan both off.
The market volatility has forced several companies to postpone their initial public stock offerings as well as plans for mergers and acquisitions. That hurts investment banks and brokerages.
Although traders said Wall Street was not in a panic, they conceded that selling was fast and furious.
"They're just slapping things," said Doug Myers, vice president of equity trading at Wachovia Securities. "A trader's time horizon is about seven minutes. It is always completely dark before it turns completely black. Just when you thought it was over, it is going to hurt a little more."
The trouble began early in the day, after the government said the Consumer Price Index rose 0.7 percent in March. The core rate, which excludes food and energy, rose 0.4 percent, and both figures were above analysts' forecasts.
The overall increase resulted from a 4.9 percent rise in energy prices. Higher hotel costs, air fares and medical costs caused core inflation to post its highest rise since January 1995.
The hike heightened fears the Federal Reserve will boost short-term interest rates more aggressively when its policy-setting panel meets on May 16. The central bank has boosted short-term rates five times, each by 25 basis points, since last June to slow the booming economy.
|A trader wipes his brow near the close of trading April 12
Pierre Ellis, senior economist at Primark Decision Economics, said the CPI report raised the prospect of the Fed raising interest rates by a 0.50 basis points, instead of the 0.25 basis points Wall Street has expected.
"The serious news is the core figure being so high," he said.
The inflation news overwhelmed robust earnings from Sun Microsystems Inc. Sun, the leading maker of powerful computer servers used to run Web sites, reported quarterly profits that beat Wall Street forecasts, along with a 35 percent jump in revenues.
Before the figures came out, Wall Street had been widely expected to rally after a week of heavy losses for the Dow and Nasdaq.
"This was a lot worse than expected. Previously we've only seen inflation in the headline numbers, but this showed it coming through in the core, and it's going to put everything on hold until the FOMC meeting in four week's time," one senior U.K. sales trader said in reference to a meeting of the Federal
Reserve's policy makers.
"With Easter coming up, it doesn't look as though we've got much chance of rallying."
FOXNews.com reporter Adrienne Mand, Reuters and The Associated Press contributed to this report