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Wall St. takes it on the chin
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December 14, 1998: 5:35 p.m. ET
Corporate profits and worries about the emerging markets keep investors jittery
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NEW YORK (CNNfn) - Technology issues and most other U.S. stocks fell sharply on Monday amid concerns about corporate profits, Japan's economy and the outlook for emerging markets.
The Dow Jones industrial average ended the day down 126.16 points, or 1.43 percent, at 8,695.60, its lowest close since Oct. 30. Declines swamped advances 2,285 to 790 on a trading volume of 700 million shares.
The Nasdaq Composite dropped 62.39, or 3.07 percent, to 1,966.92, its eighth-largest point loss ever. The S&P 500 benchmark index fell 25.26, or 2.17 percent, to 1,141.20.
Bonds powered ahead as stocks floundered, helped by weakness in overseas markets and signs of lower Japanese business confidence in the widely-followed tankan survey. Brazil's Bovespa index plunged 8.4 percent.
The benchmark 30-year Treasury bond was up 19/32 of a point in price, for a yield of 4.98 percent.
The dollar ended mixed against the German mark and the Japanese yen, hurt by investors' confusion over the impeachment vote of President Clinton scheduled for Thursday. The dollar fetched 1.64 marks and 115.46 yen.
While some analysts on Wall Street attributed Monday's losses to the impeachment question looming in Washington, other experts said U.S. stocks were due for a correction.
Al Goldman, chief market strategist at A.G. Edwards in St. Louis, said Wall Street needed a breather after the Dow jumped 24 percent in six weeks and the Nasdaq soared 36 percent from its low on Oct. 8.
"Uncertainty in Washington has greased the slide downward," Goldman said.
The losses Monday may set the stage for an end-of -year rally later this week, Goldman said.
But Hugh Johnson, chief investment officer at brokerage First Albany Corp., said the impeachment process is having a psychological effect on markets around the world. (363 WAV) or (363 AIFF)
Mergers and cutbacks
Leading the way on Wall Street, shares of United States Satellite Broadcasting Co. (USSB) were up 29.22 percent after General Motors subsidiary Hughes Electronics announced plans to buy it in a deal worth $1.3 billion. The stock rose 2-13/16 to 12-7/16.
Likewise, shares of New England Electric System (NES) bucked the trend and rose after a UK utilities group said it is buying the company for $3.2 billion in cash, a 25 percent premium over the stock's Friday close. The stock ended the day up 5/14, or 12.21 percent, at 48-1/4.
Other parts of the market weren't so lucky.
In the technology sector, investors weren't impressed with news that Oracle (ORCL) and Sun Microsystems (SUNW) are licensing major parts of each other's software in a direct assault on Microsoft (MSFT). Oracle lost 1/8 to 37-1/8 and Sun Microsystem fell 1-1/8 to 76-1/4.
Microsoft, meanwhile, fell after reporting it was buying a $200 million stake in Qwest Communications International (QWST) to tap into the company's high-speed Web network. Shares of Microsoft were down 6-1/16 to 127-15/16, and Qwest lost 2-3/8 to 41.
Citigroup (C) lost ground on news of a $1 billion restructuring charge to pave the way for its merger with Travelers Group. The stock ended down 1-3/4 at 46.
And toy maker giant Mattel (MAT) failed to sway investors after announcing a $3.8 billion purchase of Learning Co., a producer of educational and entertainment software. Mattel also warned that fiscal 1999 earnings would be $1.50 a share, 59 cents lower than expected. The stock closed down 8-1/8, or 26.97 percent, at 22.
Cisco Systems (CSCO) lost 3-1/8 to 80-3/8, while shares of Dell Computer (DELL) dropped 2-7/16 to 64-3/4 and Intel (INTC) shed 4-7/8 to 111-9/16. Dow member IBM (IBM) lost 5-1/8 to 162-7/8, and banking giant J.P. Morgan (JPM) slumped 3-7/16 to 97-1/16. Internet search engine Yahoo (YHOO) lost 4-7/16 to close at 191-1/4.
Online bookseller Amazon.com (AMZN) was down 3/4 at 222-1/4 after rising earlier in the session on news that the company was added to the Nasdaq 100 index on Monday.
(Click here for a look at today's CNNfn market movers).
-- by staff writer Martine Costello
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