Dow’s Plunge Pushes Bond Prices Higher : Market Overview
* The stock market took a steep and sudden drop. The Dow Jones average of 30 industrials fell 120.31 points to 2,943.20, finishing the week with a loss of 102.42 points.
* Treasury bond prices closed higher as the market benefited from gloomy economic news and from investors fleeing tumbling stock prices.
* The dollar closed sharply lower in a nervous selloff ignited by the sudden dive on Wall Street.
* Oil futures surged on reports that Russia suspended some international oil exports.
Stocks
The Dow’s slide marked the average’s biggest daily drop since it plunged 190.58 on Oct. 13, 1989, and its fifth-largest point loss on record.
Declining issues outnumbered gainers by nearly 5 to 1 on the New York Stock Exchange.
Among the highlights:
* Among the major losers in the Dow index, Boeing tumbled $3.75 to $45.125, Eastman Kodak lost $3 to $46.25, pharmaceuticals giant Merck slumped $7.625 to $137 and 3M Co. fell $3.75 to $88.
* Retailers fell on new worries about weak consumer spending. Wal-Mart dropped $3.25 to $47.375, Home Depot lost $3 to $57.75, Price Co. slid $3.50 to $56.50 and Gap Inc. tumbled $4 to $48.25.
* Banking issues that plunged included Chase Manhattan, down $1 to $16.875; Wells Fargo, off $2.625 to $59.625, and Banc One Corp., down $2.75 to $43.
* Biotech stocks leading smaller issues lower included Amgen, down $5.50 to $52; Immune Response Corp., down $6.25 to $34.75, and Biogen, down $7.875 to $38.625.
On overseas markets, London stocks slumped at the end of a volatile week. The Financial Times-Stock Exchange 100 index finished 15.0 lower on the day at 2,546.6.
In Frankfurt, the German 30-share DAX index ended 8.41 points up at 1,629.37, its highest close for about eight weeks.
In Tokyo, stocks extended recent losses. The 225-share Nikkei average fell 77.36 points or 0.32% to 24,099.18.
Credit
The price of the Treasury’s bellwether 30-year bond rose 1/8 point, or $1.25 per $1,000 in face amount. Its yield, which moves in the opposite direction from price, fell to 7.80% from 7.81% Thursday.
Bond prices usually are boosted by signs of economic slowdown because they increase the chances that the Federal Reserve will lower interest rates, which benefits bonds.
Currency
The dollar dropped to 1.6190 German marks in New York from 1.62975 Thursday. Earlier in Europe, it rose to 1.6375 marks from 1.6305 marks.
The dollar dropped to 129.40 Japanese yen in New York from 129.62 Thursday. Earlier in Tokyo, it rose 0.12 yen to 129.77 yen. It was quoted later in London at 130.00 yen.
The dollar also reversed direction against the British pound. The pound jumped to $1.7860 in New York from $1.7765 Thursday. Earlier in London, it fell to $1.7690 from $1.7755.
Commodities
Oil and precious metal futures prices surged in reaction to a plunge in the stock market and a halt to some Russian oil exports.
A plunge in Standard & Poor’s 500 stock-index futures on the Chicago Mercantile Exchange tripped a “circuit breaker” adopted after the 1987 stock market crash. Trading in S&P; 500 futures was halted for 18 minutes after the December contract’s loss reached 12 points at 2:12 p.m. Chicago time.
The contract fell another 2.53 points after trading resumed, settling at 382.62.
Light, sweet crude for December delivery rose 27 cents to $22.79 a barrel on the New York Mercantile Exchange. December home heating oil leaped 1.78 cents to 67.48 cents a gallon. December unleaded gasoline climbed 0.83 cent to 64.02 cents a gallon. December natural gas rose 4 cents to $2.04 per 1,000 cubic feet.
Precious metals, which tend to attract investors during times of inflation and international turmoil, also rose sharply.
On New York’s Commodity Exchange, December gold deliveries rose $4.40 to $360.10 an ounce, and December silver rose 4.7 cents to $4.027 an ounce.
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