Dow’s Decline Continues on Foreign Woes; Dollar Falls

U.S. stocks stumbled again on Thursday, weighed down by more declines in Russian and Asian financial markets.

Meanwhile, the dollar fell sharply against the yen.

On Wall Street, supportive words from Abby J. Cohen, one of the market’s best-known bulls, failed to keep the Dow Jones industrial average from sinking 93.46 points, or 1.1%, to 8,459.50. It closed at its lowest point of the day.

The broad market also was weak, with losers topping winners by nearly 2 to 1 on the New York Stock Exchange and 27 to 15 on Nasdaq.

Trading volume slowed, however, to 661 million shares on the Big Board.

In Russia, stocks continued to collapse, falling 6.5%, as fears mounted that the country will be forced to devalue the ruble--thus joining the Asian devaluation spiral.

Asian stock markets also fell again, with the Hong Kong market sliding nearly 3% to its lowest level since 1993.

With stock and bond markets devastated from Russia to East Asia to Latin America, Wall Street fears that the economic reverberations will only intensify.

“Synchronized global recession and deflation--that’s the worry,” said Hugh Johnson, chief investment officer at First Albany Corp.

But Cohen, market strategist at Goldman Sachs, told clients on Thursday that the direct impact of Russian and Asian woes on the United States has been, and will remain, moderate.

“Our economic forecast continues to call for ongoing global growth,” she said. And she stuck by her forecast that the Dow will rebound to 9,300 by the year’s end--a 10% rise from current levels.

With Thursday’s loss, the Dow is off 9.4% from its peak.

The Nasdaq composite index, which slid 1.3% to 1,802.54 on Thursday, now is off 10.5% from its peak. The Standard & Poor’s index of 600 smaller stocks, down 1.5% on Thursday, has plunged 17.3% from its record high.

The bond market may have helped undermine stocks Thursday. Yields inched higher for a second day, with the 30-year Treasury bond ending at 5.64%, up from 5.62% on Wednesday.

The Treasury sold new 30-year bonds at a yield of 5.59%.

Demand for bonds was sapped by the dollar’s slide to 145.16 yen in New York, down 1.28 yen from Wednesday. Japanese officials reiterated Thursday that they may take action to shore up the yen’s value--which could help stabilize other Asian markets.

“The Japanese are a lot more concerned about the yen and they don’t want to be the cause of Asia melting down,” said David Ogg, a trader at Dresdner Bank, adding that he expects the dollar to fall to 138 yen within a month.

In commodities trading, crude oil futures rose 50 cents to $13.21 a barrel after Saudi Arabia said it will cut deliveries as part of a plan to reduce excess supplies.

For U.S. stocks, stability in the yen--and even a little strength in commodity prices--could help restore faith that weakened corporate earnings growth will give way to stronger growth next year, some analysts say.

Even so, experts note that the market has held relatively firm since Aug. 5. Despite deep intra-day declines, the Dow has managed to hold above 8,400.

Likewise, the Russell 2,000 index has held above last week’s lows.

Among Thursday’s highlights:

* The Dow was hammered by Dupont, which sank $5.50 to $55 after warning that current-quarter earnings will continue to be hurt by Asia’s crisis.

* Some bank and financial stocks tumbled on concern about more potential loan losses related to emerging markets. Citicorp slid $7 to $140, American Express dropped $3.38 to $95.25 and Fleet Financial sank $2.13 to $76.13.

* Airline stocks fell as AMR, parent of American, again attempted to raise fares. AMR sank $2.50 to $60.31; Delta lost $2.75 to $114.50.

Market Roundup, D6