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Sharp declines for stocks
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September 21, 1999: 3:06 p.m. ET
Markets suffer amid falling dollar, surging trade deficit and Apple profit warning
By Staff Writer Malina Poshtova Zang
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NEW YORK (CNNfn) - Wall Street suffered heavy losses late Tuesday, caused by a renewed slump in the dollar and a record U.S. trade deficit that once again undermined investors' confidence in the value of U.S. assets.
A surprise profit warning by Apple Computer added weight on the market, triggering fears about overall profits in the technology sector.
Shortly before 3 p.m. ET, the Dow Jones industrial average tumbled 188.38 points, or 1.8 percent, to 10,635.52. Market breadth on the New York Stock Exchange was decidedly negative, with declines leaping ahead of advances 2,274 to 708, as trading volume climbed to 592 million shares.
The Nasdaq composite lost 45.49 points, or 1.6 percent, to 2,840.56, and the S&P 500 index fell 22.72, or 1.6 percent, to 1,312.81. (Click here for a look at today's CNNfn market movers.)
The market was rocked by news that the trade gap, the difference between the value of goods and services the U.S. imports from and exports to other countries, surged to $25.2 billion in July, especially since the revised $24.6 billion deficit scored in June also was a record. The July number came in well above market predictions.
The trade report, coupled with a severely weakened dollar, sent bond prices falling and yields rising. The bellwether 30-year Treasury bond lost 10/32 of a point in price, raising the yield to 6.09 percent from Monday's 6.07 percent.
The dollar began its slide overnight after the Bank of Japan declined to intervene on foreign exchange markets to halt the surge in the yen. The BOJ refused to budge on its monetary policy, even though an overly strong yen could jeopardize Japan's fledgling economic recovery.
The July trade gap news only worsened the dollar's decline, sending the currency down against the euro as well.
Apple profit warning stuns tech sector
Back in stocks, Monday's surprise profit warning by Apple Computer (AAPL) sent shivers down the spines of technology investors and pared Apple's shares sharply.
The stock was down 8-5/16, or more than 10 percent, to 70-3/4 Tuesday. Apple said its fiscal fourth-quarter earnings would fall short of expectations, blaming a shortage of G4 chips that power its new line of Power Mac computers.
Shares of Motorola (MOT), which makes the G4 chip, fell 2 to 88-11/16 amid concerns that production problems at the company could hurt its earnings as well. Motorola disputed Apple's claim about slow shipments.
Elsewhere among the computer makers, shares of Gateway (GTW) fell 2-7/8 to 51 and Dell (DELL) lost 2 to 46-7/8. On the Dow, IBM (IBM) shed 1-7/8 to 128-1/4 and Hewlett Packard (HWP) dropped 2-5/8 to 101-7/16.
Deals and winners
There were a few winning stocks in the market, despite the overall gloomy economic and earnings news that sent most shares lower.
Among them, shares of Bell Atlantic (BEL) climbed 15/16 to 64-9/16 after the largest U.S. local phone service provider reached a long-expected deal with Britain's Vodafone (VOD) to form the country's biggest wireless communications business.
Vodafone's American depositary receipts gained 5-7/8 to 217-7/8.
Also among the select group of gainers, shares of retailer Bed, Bath and Beyond (BBBY) rallied 1-5/8 to 30-1/2 on news the company will replace BankBoston (BKB) as part of the S&P 500 index. BankBoston is being bought out by Fleet Financial (FLT). 
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