Dow Slips 23; Most World Markets Slide
Investors were mostly in a selling mood worldwide Monday, as European and Latin American markets were hammered, while U.S. shares were broadly but modestly lower.
Early today in Asia, the sell-off there intensified.
Meanwhile, oil prices slumped Monday toward 10-year lows under the weight of new evidence of a continuing glut of crude.
On Wall Street, the Dow finished with a loss of 23.17 points at 8,574.85, after trading in a narrow range for much of the day.
Smaller stocks, which had surged on Thursday and Friday after plummeting early in the week, turned lower again Monday. The Russell 2,000 index of smaller shares fell 1% to 411.64.
Losers topped winners by 2 to 1 on the New York Stock Exchange and by 24 to 17 on Nasdaq.
Trading volume, however, was light, as usual on a summer Monday.
In the wake of last Tuesday’s 299-point plunge in the Dow, “the tone is very guarded, while everyone is keeping a watchful eye on Asia, which looks troubling,” said Hugh Johnson, chief investment officer at First Albany.
Asian markets were mostly lower Monday, but the declines weren’t dramatic. However, sellers were out in force in Europe and in Latin America.
The Mexican market index plunged 3% to 3,731--a 16-month low--as Mexico’s central bank tightened the money supply, responding to a new record low in the peso. The peso fell to 9.15 to the dollar before strengthening slightly to 9.11.
U.S. investors, watching the peso slump, are wary about putting money into Mexico now, many analysts say. Meanwhile, Brazilian and Argentine stocks also sank Monday.
Early today in Asia, that region’s markets were in another tailspin, with Hong Kong shares down 2.7%, Singapore down 3.5% and Tokyo off 0.9%--the latter, the seventh consecutive decline.
On Monday the dollar was little changed against the yen, hovering near an eight-year high, at 146.15, on expectations Japan’s government won’t move quickly to clean up the nation’s banking mess.
“Japan is going to have to do more in terms of shutting down insolvent banks,” said David Becker, senior trader at Bank Austria. “Yen weakness is going to pervade the market for some time.”
The U.S. bond market, meanwhile, ended flat on the day.
In commodity trading, crude oil plunged more than 5%, the biggest drop in seven weeks, as the failure of producers to stem a supply glut overshadowed an impasse between Iraq and the United Nations over weapons inspections.
“We’ve still got too much oil,” said Gary Carney, a crude-oil buyer at Texaco Trading & Transportation in Oklahoma City.
Crude oil for September tumbled 75 cents to $13.05 a barrel on the New York Merc.
Among Monday’s highlights:
* J.P. Morgan led the Dow’s decline, falling $3.31 to $120.19 and leading other bank issues with exposure in Asia lower.
* Oil services companies declined as crude oil futures plunged. Baker Hughes fell $1.50 to $22.38. Schlumberger lost $2.06 to $56.25 and Dresser Industries fell $1.88 to $31.
* On the plus side, drug stocks gained for the third time in four days. Merck rose $2.25 to $126.13, Warner-Lambert gained $2 to $73.63 and Schering-Plough climbed $1.56 to $94.56.
But HMO stocks continued to fall, with Wellpoint Health off $1.25 to $55.75 and United Healthcare down $2.94 to $33.38.
* Tech stocks were mixed. Dell jumped $3 to $110.25, Yahoo rose $2.38 to $94 and Adobe Systems rose $1.94 to $32.19, but NCR lost $3 to $29.88.
Market Roundup, D13
