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Markets & Stocks
Wall St.: White House woes
November 9, 2000: 5:23 p.m. ET

Stocks tumble and recover as presidential contest ebbs and flows
By Staff Writer Jake Ulick
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NEW YORK (CNNfn) - U.S. stocks plunged but then nearly recovered Thursday as Wall Street tried to keep pace with a fast-changing White House contest two days after the nation went to the polls.

Word from Democrat Al Gore's campaign that the ballot count in Florida could drag on, and perhaps end up in court, sent the Dow Jones industrial average tumbling nearly 300 points at one point.

But the Dow and Nasdaq ended with only slight losses. Late news from Republican George W. Bush's staff countered the Gore claims and may have soothed a market that for days bet on a Republican win.

The second day of selling underscores investor uncertainty over the highest office in the land.

graphic"The comments from the Gore campaign this afternoon accelerated the selling," Clark Yingst, market analyst at Prudential Securities, told CNNfn's market coverage.

Still, Yingst also linked the losses to concerns about slowing economic growth that have plagued the markets for months.



The Nasdaq fell for a fourth day on weakness in Internet stocks after several Web-related companies disappointed investors. And worries about earnings strength at Walt Disney and sales gains at IBM weighed on the Dow industrials.

The Nasdaq lost 31.35 points, or 1 percent, to 3,200.35, well above the 144-point loss suffered earlier in the afternoon. And after being lower by 289 points, the Dow ended down 72.81 to 10,834.25. The S&P 500 declined 9.14 to 1,400.14.

graphicMore stocks fell than rose. Declining issues on the New York Stock Exchange topped advancing ones 1,730 to 1,085, on volume of 1.1 billion shares. Nasdaq losers winners 2,598 to 1,266. More than 1.9 billion shares changed hands.

In other markets, Treasury securities rose. The dollar fell against the euro but was little changed versus the yen.



President who?

New questions over the presidential election continued as Florida officials recounted the ballots to determine the winner of the state's all-important 25 electoral votes. The latest figures compiled by the Associated Press cut Texas Gov. Bush's advantage to 341 votes, with another canvass due later Thursday.

graphicBut Wiliam Daley, Gore's campaign chairman, pitched the latest curveball, asserting that as many as 20,000 voters in Palm Beach County who tried to vote for Gore had their votes counted for Pat Buchanan, the reform candidate, or for no one.

"If the will of the people is to prevail, Al Gore should be awarded a victory in Florida and be our next president," Daley said, addressing a news conference.

The remarks raised the possibilities of hand recounts and legal challenges that could postpone any results for weeks. Adding to the confusion, Bush officials late Thursday devoted a news conference to defending the Texas governor's winning tally.



"What this does is it keeps buyers away," Richard Cripps, chief market strategist at Legg Mason, told CNNfn's Before Hours. "It's a lack of buyers. And they would prefer some certainty."

Craig Ellis, portfolio manager for Safari Capital Management, told CNNfn's Talking Stocks that the presidential uncertainty is a real detriment to institutional investors.  (423K WAV) (423K AIFF)

The closest White House race in decades brings some certainties. A lack of major voter support for either candidate could make it tough for Bush or Gore to push through significant tax cuts or spending plans -- positive for  a market that likes legislative gridlock.



"Regardless of who is president, it looks like they will not have a mandate," Mickey Levy, chief economist at Bank of America, told CNNfn's Market Call.

Aside from leadership uncertainty, investors found other reasons to dump stocks.



IBM's (IBM: Research, Estimates) Chairman and CEO Louis Gerstner readied analysts for lower sales growth, sending the stock down 56 cents to $99.44.

Gerstner forecast revenue gains in the high-single digits -- a step down from statements he made last year to look for 10 percent sales growth or better.

Disney fell $5.75 to $31.13 in heavy trading after Merrill Lynch lowered its earnings outlook for the company. Merrill analyst Jessica Reif-Cohen raised concerns that slowing advertising means the owner of ABC will not be able to deliver the kind of profit surprise it produced this year.

Ratings of ABC's  "Who Wants to be a Millionaire," one of early 2000's most-watched shows, have fallen in recent weeks. Still, Disney (DIS: Research, Estimates managed to report fiscal fourth-quarter earnings of 11 cents a share Thursday, well ahead of the 8 cents a share in the year-earlier quarter.

In the Internet sector, advertising firm 24/7 Media (TFSM: Research, Estimates) plunged $1.69 to $2.94 after reporting a third-quarter loss of 59 cents a share, 12 cents wider than estimates. At least two brokerage downgrades followed.

Internet Capital (ICGE: Research, Estimates) toppled $5.06 to $11.19. The business-to-business Internet company, whose stock once traded as high as $212, said it plans to cut its staff by 35 percent and take a fourth-quarter charge of $25 million-to-$30 million.

And Engage (ENGA: Research, Estimates) lost $1 to $2.47 after the Internet marketing firm warned that its fiscal first-quarter revenue would be lower than expected.

More news from CNNfn.com for investors:

·     Mutual Funds Notebook

·     Focus: IPO rebirth?

·     The Politics of Business

Other Internet stocks followed. Yahoo! (YHOO: Research, Estimates) tumbled $6.19 to $58.815, while eBay (EBAY: Research, Estimates) lost $2.94 to $48.69.

Shopping is dropping

Two major retailers saw their shares suffer after posting weaker financial results. Kmart (KM: Research, Estimates) fell 13 cents to $5.81 after saying it lost 14 cents a share in the third quarter versus Wall Street forecasts for a 10 cent per share shortfall. Gap (GPS: Research, Estimates) reported a quarterly profit of 21 cents a share, well below the 35 cents earned a year earlier. Its stock declined $1.63 to $24.63.

With the economy slowing under higher interest rates, retail stocks have drawn few buyers. Shares of Wal-Mart, the nation's biggest retailer, are down more than 30 percent from their 52-week high.

Dell Computer (DELL: Research, Estimates) declined $1.94 to $28.38 ahead of the computer maker's quarterly earnings. Dell ultimately said it earned $674 million, or 25 cents per share, matching estimates.

The day's losses come amid a surprise jump in producer prices, which have been relatively stable this year. The Producer Price index rose 0.4 percent last month, the Labor Department said, well above the 0.1 percent gain expected by economists.

With the economy slowing, some economists had been expecting the Federal Reserve to cut interest rates next year. But advancing prices complicate that task, keeping the central bank concerned that inflation could derail the record expansion.

Still, the core PPI, which excludes food and energy costs, fell 0.1 percent in October, clouding the picture.



graphicSeparately, the number of Americans filing new claims for unemployment benefits rose to a nearly 22-month high of 344,000 for the week ended Nov. 4, the Labor Department said, a sign the tight labor market may be loosening.

The nation's unemployment rate remained at a 30-year low of 3.9 percent in October. But that could tick higher if Thursday's claims numbers become a trend.

"While today's data reinforces the notion of slowing job growth, it does not yet mean that the economy is about to undergo a period of outright job losses," said Tony Crescenzi, bond analyst at Miller Tabak & Co. "But it is at least clear that the economy is now on that path." 

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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.