Nasdaq Plunges as Wall Street Jitters Intensify

Published December 20th, 2000 - 02:00 GMT

Technology shares plunged Wednesday amid deepening concerns over corporate earnings and the slowing US economy. 

At 1800 GMT, the tech-heavy Nasdaq had plummeted 156.97 points (6.25 percent) at 2,354.74 and the blue-chip Dow Jones industrials skidded 171.02 points (1.62 percent) to 10,413.35. 

The Standard and Poor's 500 slid 32.03 points (2.45 percent) to 1,273.57. 

The Nasdaq on Tuesday slumped more than four percent to its lowest level since August 1999. 

Dealers said investors continue to be disappointed that the Federal Reserve did not lower rates. On Tuesday, the Fed left a key rate unchanged at 6.5 percent, but also made clear that there are risks of economic weakness "in the foreseeable future." 

Additionally, broker downgrades of Cisco, Hewlett-Packard and IBM acted to pull the whole market lower. 

"The selling is now getting to the big caps," said James Waggoner, chief market strategist with Sands Brothers. "And while we thought the Nasdaq could hold above 2,400, it fell through that with ease." 

Looking ahead, he said the tech sector was unlikely to shake off the bearish sentiment until the Federal Reserve cuts interest rates. 

"But maybe today will prove to be the ultimate clean out from which we can finally reach a bottom," he added. 

Among the session's major fallers was Cisco Systems, which plunged after Merrill Lynch downgraded the stock. 

Merrill analyst Michael Ching said he cut his rating on the stock due to "persistent concerns over service provider capital spending, and emerging fears over a slowdown in corporate information technology spending." 

Cisco was down 10 percent, or 4-3/16 at 37-9/16. 

Merrill was also responsible for the slide in the hardware sector after it cut ratings on HP and IBM.  

HP was down 1-7/16, or eight percent lower at 29-7/8. IBM shed 3-11/16, or four percent, at 86-7/16. 

Investors flocked to the bond market for safety, pushing the yield on the 10-year bond down to 5.085 percent against 5.196 percent Tuesday and on the 30-year bond to 5.419 percent against 5.473 percent. Bond yields and prices move in opposite directions -- NEW YORK (AFP)  

 

 

 

© 2000 Al Bawaba (www.albawaba.com)

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