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Wall St. takes a beating
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September 21, 1999: 4:58 p.m. ET
Falling dollar and surging trade deficit send stocks tumbling; Apple warning adds pressure
By Staff Writer Malina Poshtova Zang
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NEW YORK (CNNfn) - Wall Street suffered one of its biggest losses this year Tuesday, as the dollar resumed its decline against the Japanese yen, data showed the U.S. trade deficit ballooning to a record in July and Apple Computer issued a surprise profit warning.
The Dow Jones industrial average tumbled 225.43 points, or 2.1 percent, to 10,598.47, suffering its third biggest one-day point loss for the year. The Dow is now 727.57 points, or 6.4 percent below its 11,326.04 record high hit on Aug. 25.
Market breadth on the New York Stock Exchange was decidedly negative, with declines leaping ahead of advances 2,355 to 677, as trading volume climbed to 789 million shares.
The Nasdaq composite lost 65.05 points, or 2.3 percent, to 2,821.10, and the S&P 500 index fell 27.95, or 2.1 percent, to 1,307.58.
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 a record $25.2 billion in July. That news was particularly disturbing to the market 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 9/32 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 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 9-13/16, or more than 12 percent, to 69-1/4 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 2-13/16 to 87-7/8 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 3-3/16 to 50-11/16 and Dell (DELL) lost 2-3/8 to 46-1/2. On the Dow, IBM (IBM) shed 3 to 127-1/8 and Hewlett Packard (HWP) dropped 4-11/16 to 99-3/8.
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 United State's biggest wireless communications business.
Vodafone's American depositary receipts gained 4-5/8 to 216-5/8.
Also among the select group of gainers, shares of retailer Bed, Bath and Beyond (BBBY) rallied 1-15/16 to 30-13/16 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).
(Click here for a look at today's CNNfn market movers.)
(Click here for a look at today's CNNfn technology stocks report.) 
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