|
Sharp losses pound stocks
|
 |
August 31, 1998: 1:45 p.m. ET
Market virtually erases all of its gains for the year as Russian jitters continue
|
NEW YORK (CNNfn) - Wall Street remained caught in the arms of bearish investors in afternoon trading Monday, reeling from fears that the stock market's woes are far from over.
Investors, emerging fresh form last week's steep sell-off, found themselves caught in more selling as the political and economic future of Russia remained uncertain and data showed the U.S. economy is slowing down.
Shortly before 1:30 p.m. the Dow Jones industrial average was 121.52 points, or 1.5 percent, lower at 7,930.16. The last time the Dow closed below 8,000 was on Jan. 30. The index began the year at 7,908.25.
On the New York Stock Exchange, losers overwhelmingly led gainers 2,464 to 597 as 505 million shares changed hands.
The Nasdaq Composite tumbled 77.75, or 4.8 percent, to 1,561.93, dipping below the 1,570.35 level at which it started the year. The S&P 500 index fell 22.63, or 2.3 percent, to 1,004.62. The Russell 2000 index of small cap stocks lost 13.39, or 3.7 percent, to 345.15. The only major gauge trading in positive territory was the Dow utilities index, rising 2.73 to 286.47. (Click here for a look at today's CNNfn market movers.)
Meanwhile in Moscow, the lower house of the Russian parliament, the Duma, voted to reject once-ousted then reappointed Prime Minister Viktor Chernomyrdin. Russian President Boris Yeltsin is now likely to resubmit Chernomyrdin's nomination. If Yeltsin's candidate fails to pass the Duma three times in a row, Yeltsin must dissolve the parliament and call legislative elections. He then can appoint whomever he wants to be prime minister.
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. Meanwhile, Russia's international creditors continued to urge reform but offered no money to help.
An economic collapse in Russia is unlikely to hurt U.S. growth directly, but its after effects could 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 turned higher as soon as the stock market resumed its slide. A busy schedule of economic data due to be released during the week also kept traders on edge. In the latest sign that the U.S. economy may be slowing, new home sales fell 1.6 percent in July, well below market expectations. The benchmark 30-year Treasury bond traded unchanged in price for a yield of 5.34 percent.
The dollar traded in narrow ranges against the German mark and the Japanese yen amid continuing anxiety over the situation in Russia. The greenback suffered some pressure from the stock market's troubles.
How far down is too far?
In the stock market, financial and banking shares, which got pummeled in last week's sell-off, put in a mixed performance. 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 2-1/2 higher at 100-1/4. 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 volatile gainers included Citicorp (CCI), up 5/8 to 117-3/4. But Chase Manhattan (CMB) was off 1/16 at 56-7/16. Dow member American Express (AXP) fell 3-11/16 to 83-13/16, while fellow blue chip Travelers (TRV) was up 1/16 at 48-3/8.
The technology sector's pain was much worse. After a small bounce at the open, shares of the high-tech heavyweights headed south again. Dell (DELL) lost 11-1/2, or 9.6 percent, to 107-1/4, Intel (INTC) traded down 3-1/2 to 73-1/2, Microsoft (MSFT) lost 5-1/8 to 100-1/8 and Dow component IBM (IBM) was off 3-13/16 at 118-3/4.
Finally, the oil sector was one of the few corners of the market sheltered from investors' wrath. A Bear Stearns upgrade of three oil drilling companies helped the rest of the sector hold its ground. Shares of Arco (ARC) rose 1-15/16 to 60-1/2, Kerr-McGee (KMG) gained 11/16 to 40-3/4, and USX-Marathon (MRO) climbed 3/16 to 27-3/4 after receiving "buy" ratings from Bear Stearns. Among the Dow 30, shares of Chevron (CHV) rose 1-7/8 to 77-1/8 and Exxon (XON) gained 7/16 to 68. 
-- by staff writer Malina Poshtova Zang
|
|
|
|
|
 |
|
