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Dow feels a bearish shiver
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July 23, 1998: 1:53 p.m. ET
Stocks tumble on earnings troubles at Boeing, fears Asian crisis here to stay
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NEW YORK (CNNfn) - Concerns that corporate America's profit boom is about to slow down and suspicion that Asia's economic problems are here to stay for a while continued to pummel U.S. stocks in afternoon trading Thursday.
Blue chips tumbled amid a meltdown in the stock of Boeing after the world's largest aircraft maker reported a 46 percent drop in its quarterly earnings. Meanwhile, debt rating agency Moody's Investors Service threatened to downgrade Japan's immaculate sovereign debt rating, sparking heavy selling in Asian markets that later hit Wall Street as well.
Coming on the back of two days of hawkish testimony and talk of market correction from Federal Reserve Chairman Alan Greenspan, the news from Boeing and Moody's was enough to upset already nervous investors, sending many of them running for the exits and dumping stocks along the way.
Shortly before 1:30 p.m. the Dow Jones industrial average was down 111.22 points, or about 1.2 percent, to 9,017.69. Market breadth was heavily negative, with declines beating advances 2,144 to 727 as 475 million shares changed hands on the New York Stock Exchange. Several computer sell programs added speed to the market's declines.
The Nasdaq Composite fell 18.79 to 1,950.96 and the S&P 500 index lost 14.44, or about 1.2 percent, to 1,149.64.
The bond market traded higher, recovering after a rumor that an overseas central bank was selling U.S. Treasury bills erased the market's early gains. The benchmark 30-year Treasury bond traded 9/32 of a point higher in price for a yield of 5.66 percent.
The dollar rose against the Japanese yen, building its gains on the Moody's downgrade warning. But the talk of central bank selling in the bond market later pulled the greenback off its highs.
Boeing sends Dow tumbling
News that Boeing (BA) earned only 26 cents a share in the second quarter, against expectations for 33 cents, sent the company's shares tumbling 6-1/16, or almost 13 percent, to 41-11/16 and rattled already nervous investors further.
Boeing was joined by fellow Dow member Chevron (CHV), whose earnings dropped sharply in the second quarter and whose stock lost 2-7/16 to 81-11/16 Thursday.
Elsewhere, weakness among major technology issues put additional pressure on the market, as shares of Dow member IBM (IBM) fell 1-1/16 to 126-3/8 and Dell (DELL) shed 7/8 to 108-9/16. Microsoft (MSFT) tumbled 2-5/8 to 114-1/8 in the face of a new Justice Department probe.
Internet-related shares, the market's hottest sector lately, once again showed their highly speculative nature. Shares of online book retailer Amazon.com (AMZN) lost 3-3/4 to 130-1/4 even after the company reported a smaller-than-expected loss late Wednesday. Amazon's shares had rallied strongly over the past few days as investors prepared to hear about the company's earnings.
But Internet service provider Mindspring (MSPG) saw its stock surge 9 to 149-5/16 after turning in a profit based on record revenues.
Finally, shares of Amgen (AMGN) rallied 4-3/16 to 75-3/4 after a strong earnings report based on solid sales for the company's popular drugs Epogen and Neupogen, blood treatments used by patients on kidney dialysis and those suffering from AIDS. Lehman Brothers and BancAmerica Robertson Stephens upgraded the stock. 
-- by staff writer Malina Poshtova Zang
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