|
Dow hits Internet iceberg
|
 |
November 30, 1998: 5:37 p.m. ET
Fears that market is overbought pummel Internet issues, pulling blue-chips along
|
NEW YORK (CNNfn) - U.S. stocks came in from the heat Monday, closing sharply lower as a plunge in highly-priced Internet issues sparked concerns that the market overall is overbought.
Ending a stellar two-month run, the Dow Jones industrial average closed down 216.53 points, or about 2.3 percent, at 9,116.55. On the New York Stock Exchange, 2,048 issues declined and 1,071 advanced, as 693 million shares changed hands.
For November, the Dow gained 524.45 points, or 6.1 percent, boosting its gain for the year to 15.3 percent. At the start of October, the Dow held a loss of nearly 1 percent for the year.
Dragged down by Internet stocks and high-tech issues, the Nasdaq plunged 66.90 points to 1,949.54, or 3.3 percent. The S&P 500 index fell 28.66, or 2.4 percent, to 1,163.63.
The Nasdaq rose 178.16 points, or 10.1 percent, in November, increasing its gain for the year to 24.2 percent.
Banking, transportation, energy and retail stocks all trailed Internet issues into negative territory.
Alan Hoffman, stock market strategist at Value Line Asset Management, said the dip Monday offers a "launching pad" for stocks as the market gears up for expected declines in interest rates. (196K WAV) or (196K AIFF)
These lower borrowing costs became more of a reality Monday, as bonds rallied on the softness in the stock market. Investors ran to the safety and fixed returns of Treasury securities. The 30-year Treasury issue was up 1-12/32 in price for a yield of 5.07 percent.
The dollar held its own against the Japanese yen, but fell sharply against the German mark amid diminishing prospects for an interest-rate cut by the Bundesbank.
Internet issues set down-beat
Those fickle Internet-related stocks, fresh from remarkable gains during the past several weeks, were among the first on Wall Street to find a sluggish rhythm.
Atop the list were the so-called "e-tailers" which had been running strong on hopes for a stellar cyber-shopping season. That bubble on Monday began to lose some air, however.
One of last week's standouts, literature peddler Books-A-Million (BAMM), plunged 9-7/16, or 24 percent, 29-1/2, while big rival Amazon.com (AMZN) plunged 24-5/8, or about 11 percent, to 192.
Also cracking was online software and hardware seller Egghead.com (EGGS), it too, fell from its solid gains of last week. Egghead sank 6-1/8, or about 19 percent, to 25-1/2, in heavy trading. Online auctioneer Onsale (ONSL) plunged 36-1/8 to 61-1/2, or 37 percent.
Some bellwether technology issues found themselves also drawn into the down-draft. Intel (INTC) fell 2-3/8 to 107-5/8, Microsoft (MSFT) tumbled 6-1/16 to 122, and Dell Computer (DELL) lost 3 to 60-13/16.
Online giant America Online (AOL) slipped 7-1/4 to 87-5/8.
Deal-making doesn't help much
The merger front was abuzz again Monday, but two superlative deals - one inked and one still prospective - didn't cause much fanfare.
Bankers Trust (BT) tacked on 1-7/16 to 87 after Germany's Deutsche Bank announced it would buy the top-drawer New York bank in a $10.1 billion deal.
And in the oil sector, which slumped again after crude-oil prices sank below $11 a barrel to new 12-year lows, there wasn't any word if Dow member Exxon (XON) and rival Mobil (MOB) would cement a deal.
Exxon rose 11/16 to 75-1/16 and Mobil finished unchanged at 86. Meanwhile, Dow issue Chevron (CHV) slipped 2 to 83-5/8 and Texaco (TX) fell 3-1/8 to 57-11/16.
One company shooting up on merger news was Arterial Vascular Engineering (AVEI) up 16-1/2 to 48-7/8, or 50 percent, as the maker of heart-beat monitoring equipment Medtronic (MDT) agreed to buy the balloon catheter maker for $3.7 billion.
(Click here for a look at today's CNNfn market movers)
(Click here for a look at today's CNNfn tech stock report)
-- by staff writer Jamey Keaten
|
|
|
|
|
 |
|
