Markets & Stocks
Wall St. going gets tough
October 1, 1998: 1:46 p.m. ET

Stocks take heavy pounding as fear of global recession looms over markets
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NEW YORK (CNNfn) - Wall Street maintained heavy losses in afternoon trading Thursday as fear of a global recession drove investors out of nervous stock markets around the world.
     Technology and Internet stocks were subjected to especially heavy dumping, followed by financial shares and the stocks of companies issuing profit warnings. Few issues were spared in the selling spree.
     Shortly after 1:30 p.m. the Dow Jones industrial average was down 148.82 points, or 1.9 percent, to 7,693.80. Losers overwhelmed gainers 2,267 to 803 as trading volume climbed to 535 million shares on the New York Stock Exchange.
     The Nasdaq Composite tumbled 59.96, or 3.6 percent, to 1,633.88. The S&P 500 index lost 21.08, or 2.1 percent, to 995.97. (Click here for a look at today's CNNfn market movers.)
     Wall Street's plunge came on the back of a nearly 3-percent decline in the Dow industrials Wednesday that was followed by steep slides in markets in Asia, Europe and Latin America.
     Fear that a global financial rout could be heating up, with the Federal Reserve's 1/4 of a percentage point rate cut earlier this week unable to soothe nervous investors, lay behind the heavy selling.
     The near demise of a billion-dollar U.S. hedge fund, sparking speculation that more high-flying investment outlets could get unraveled in the worldwide market turmoil, added fuel to the tumble. Meanwhile, Federal Reserve Chairman Alan Greenspan told Congress the Fed-brokered bailout deal for Long-Term Capital Management was a rare occurrence aimed at preventing "substantial damage" to financial markets and potential problems for "the economies of many nations including our own."
     The bond market continued to soar to new heights, attracting buyers scared by the global stock markets' problems and seeking a safer investment. The yield on the benchmark 30-year Treasury bond fell to 4.92 percent as its price rose 27/32 of a point to 108-30/32.
     The dollar tumbled against the German mark, hurt by the stock market's problems. It also fell against the Japanese yen, despite the gloomy reading in the Bank of Japan's quarterly "tankan" survey of business confidence.
Selling fever heating up

     In stocks, investors licked their wounds from the previous day's sell-off and parted with more shares as a global financial storm loomed large.
     Apart from weakness in banking and technology shares, companies that issued profit warnings or revealed trouble in the boardroom were punished.
     Among the early losers, shares of CBT Group (CBTSY), the software maker that saw the value of its stock melt away in recent days, suffered further damage after the company said Chairman and Chief Executive Officer James Buckley and Chief Financial Officer Richard Okumoto had resigned amid what CBT called "a crisis of confidence in the company." The stock plunged 2-13/16, or almost 21 percent, to 10-11/16.
     And Fore Systems (FORE), a maker of computer networking equipment, suffered a loss of 5-3/16, or more than 31 percent, to 11-7/16 after it too issued a profit warning.
     But the damage was greatest among big-name technology stocks, with shares of Dell (DELL) losing 2-13/16 to 62-15/16, Intel {INTC] falling 2-1/8 to 83-5/8, Cisco Systems (CSCO) dropping 4-1/8 to 57-11/16, and Microsoft (MSFT) shedding 3-13/16 to 106-1/4. Dow member IBM (IBM) lost 3-5/8 to 124-7/8.
     Internet issues also took heavy blows, with (AMZN) losing 5-1/2 to 106-1/8, Yahoo! (YHOO) shedding 8 to 121-1/2 and America Online (AOL) tumbling 7-7/8 to 103-3/4.
     Finally, financial stocks, many of which have high hedge-fund loan and investment exposure and some of which participated in the $3.5 billion LTCM bailout, also lost value.
     Citicorp (CCI) lost 3-1/8 to 89-7/8 and Chase Manhattan (CMB) fell 1-1/2 to 41-5/8. Among members of the Dow 30, J.P. Morgan (JPM) shed 2-3/8 to 82-1/4, American Express (AXP) fell 2-15/16 to 74-11/16 and Travelers (TRV) was off 1-1/2 to 36. Back to top
     -- by staff writer Malina Poshtova Zang


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