Day of losses for stocks
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September 2, 1999: 5:15 p.m. ET
Inflation worries resurface after strong retail sales data, ahead of jobs report
By Staff Writer Malina Poshtova Zang
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NEW YORK (CNNfn) - U.S. stock markets managed to trim some of their deepest losses, but still closed sharply lower Thursday after a series of strong retail sales data and an important jobs report due Friday rekindled investors' concerns that the economy is still growing strong and inflation and higher interest rates are once again looming in the distance.
The Dow Jones industrial average closed at 10,843.21 with a loss of 94.67 points. On the New York Stock Exchange, losers charged ahead of gainers 2,083 to 839 as 689 million shares changed hands.
The Nasdaq composite fell 16.56 points to 2,734.24, and the S&P 500 index declined 11.96 to 1,319.11.
The bond market also suffered losses, pressured by a weakening dollar, the strong August chain-store sales reports, and speculation that Friday's August employment report could show unexpected strength and persuade the Federal Reserve that another interest rate increase is necessary before the end of the year. The bellwether 30-year Treasury bond dropped 21/32 of a point in price, raising the yield to 6.13 percent from Thursday's 6.08 percent.
The dollar's slide against the yen continued and the currency was also lower against the euro.
Broad-based selling
In the stock market, investors sold indiscriminately, dumping interest rate-sensitive issues such as banking and technology shares, but also getting rid of retail stocks, some of which were backed by strong sales data for August.
Among the Dow stocks, Sears (S) saw tumbled 3-11/16, or almost 10 percent, to 33-1/2 after the company said weak sales would result in lower-than-expected profits for the third quarter and the full year. Sears said same-store sales inched up a mere 0.1 percent in August.
But the other retail member of the 30 blue chips index, Wal-Mart (WMT), rebounded from earlier losses and edged up 11/16 to 45-11/16 after the nation's largest retailer reported an 8.7 percent jump in same-store sales in August.
The bearish mood spread well beyond retail stocks, as financial services companies, Wall Street's most interest rate-sensitive sector, took in more losses.
Shares of American Express (AXP) fell 3-1/8 to 135-7/8, Citigroup (C) shed 15/16 to 43-15/16, and J.P. Morgan (JPM) dropped 3-11/16 to 125-15/16. The three make up the financial portion of the Dow industrials.
Outside the Dow, shares of Republic New York (RNB) tumbled 7-3/16, or more than 10 percent, to 62-3/16 after a unit of the company, Republic New York Securities, suspended its chief executive and ousted the management of its futures division amid an ongoing investigation into the company's dealings with a Japanese client. Despite the scandal ripping through the bank, HSBC Holdings said it remains committed to its pending $10.3 billion merger with Republic.
Techs take a hit
In the technology sector, also heavily dependent on the direction and level of interest rates, selling prevailed as well.
Shares of Dow member IBM (IBM) dropped 1-3/8 to 125-7/8.
Fear of stiff competition added to interest rate jitters to drive the stock of Rambus (RMBS), which develops technology-facilitating communication between computer chips, down 4-3/4 to 90-1/2. The world's leading chip maker, Intel (INTC), said it would start supporting a rival technology to be announced in the first half of 2000. So far Intel has used Rambus' technology exclusively. Intel's shares rose 1-7/8 to 85-5/16.
Other major technology stocks headed lower, with Microsoft (MSFT) losing 9/16 to 91-13/16, Cisco Systems (CSCO) dropping 11/16 to 68-1/4 and Dell (DELL) down 3/16 to 47-11/16.
But there was one bright spot. Blue chip Hewlett Packard (HWP) erased its earlier losses and finished up 1/8 at 105-1/8.
(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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