NEW YORK (CNNfn) - U.S. stocks attempted a brief rally at the start of trading Monday but soon encountered heavy selling amid lingering concerns over the fate of world markets and the impact of the political crisis in Russia and the economic slowdown in Asia on U.S. growth and corporate bottom lines.
Shortly after 10 a.m. the Dow Jones industrial average was 112.25 points, or 1.4 percent, lower at 7,939.43. The last time the Dow closed below 8,000 was on Jan. 30. On the New York Stock Exchange, losers led gainers 1,735 to 1,809 as 141 million shares changed hands.
The Nasdaq Composite lost 44.63, or 2.7 percent, to 1,595.05 and the S&P 500 index fell 19.76, or 1.9 percent, to 1,007.49.
Meanwhile in Moscow, the lower house of the Russian parliament, the Duma, debated whether to reinstate once ousted then reappointed Prime Minister Viktor Chernomyrdin. Over the weekend, a political strategy agreement that Chernomyrdin appeared to have reached with leaders of the Communist majority in the Duma, seemed to have fallen apart.
An economic collapse in Russia is unlikely to hurt U.S. growth directly, but its after effects are likely to send shockwaves through the world's emerging markets. The financial meltdown in the former world superpower already has caused heavy trading losses among U.S. financial and investment companies.
The bond market drifted lower, as investors appeared to halt their flight to safety while awaiting the latest twist in Russia's political and economic crisis. A busy schedule of economic data due to be released during the week also kept traders on edge. The benchmark 30-year Treasury bond fell 6/32 of a point in price for a yield of 5.34 percent.
The dollar rose slightly against the German mark amid continuing anxiety over the situation in Russia. The greenback also gained against the Japanese yen, partially because of news that North Korea had fired a ballistic missile in the direction of Japan.
Leading the market up, leading it down
In the stock market, financial and banking shares, which got pummeled in last week's sell-off, were among the leaders on the way up. Investors sought bargains amid the sector's beaten stocks, after last week several of its more prominent members revealed the size of trading losses they had suffered from their exposure to Russian markets. Much of the early gains evaporated, however, after a general negative tone set in on Wall Street.
Shares of Dow component J.P. Morgan (JPM) opened with gains of more than 5 points, but soon eased and traded only 9/16 higher at 98-5/16. Late Friday the Wall Street powerhouse said its exposure to Russia was about $160 million and its trading revenue had suffered from losses in emerging markets.
Other short-lived gainers included Citicorp (CCI), which rose at the open, then fell 1-3/8 to 115-3/4, and Chase Manhattan (CMB), which also rose, then drifted back and traded unchanged at 56-1/2.
The technology sector's recovery was even briefer. After a small bounce at the open, shares of many high-tech heavyweights headed south again. Dell (DELL) lost 6-7/16 to 112-5/16, Intel (INTC) traded down 1-7/8 to 75-1/8, Microsoft (MSFT) lost 2 to 103-1/4 and Dow component IBM (IBM) was off 3-5/32 at 119-13/32.
Elsewhere in the market, shares of TSI Inc. (TSII), a maker of measuring and control tools, rallied 1-1/16, or more than 14 percent, to 8-7/16 after a positive earnings forecast for the company was published in Barron's over the weekend.
-- by staff writer Malina Poshtova Zang