U.S. stocks pulled back again Thursday, as...
U.S. stocks pulled back again Thursday, as new turmoil in world markets and a downgrade of computer chip giant Intel by a key analyst kept buyers away.
Meanwhile, the dollar fell further against the Japanese yen. The bond market was a winner, as some investors rushed to safer havens such as U.S. Treasuries--sending long-term yields to new lows--on news of U.S. military strikes against terrorist camps in Afghanistan and Sudan.
On Wall Street the Dow Jones industrial average ended down 81.87 points, or 0.9%, at 8,611.41.
That brought the two-day loss to more than 100 points. The Dow had risen nearly 300 points on Monday and Tuesday, rebounding from the heavy selling of the last four weeks.
The broad market also was weak, with declining issues outnumbering advancers by a 7-4 margin on the New York Stock Exchange. Trading volume declined from Wednesday, however.
The Russell 2,000 index of smaller stocks lost 1% to 401.73. The Nasdaq composite dipped 0.6%.
Stocks fell after President Clinton said the United States had launched strikes against terrorist targets in Sudan and Afghanistan, believed to have been behind the Aug. 7 bombings of two U.S. embassies in Africa.
That news added to other worries that have been weighing on the market for months, including Asia’s economic crisis, Japan’s banking system woes, Clinton’s legal troubles in the Monica Lewinsky case, and--most important, perhaps--slowing U.S. corporate profit growth.
Still, on its own, “As long as the bombing doesn’t escalate into anything other than just two isolated incidents, it doesn’t mean much,” said Joseph Barthel, chief investment strategist at Fahnestock & Co. “It takes a little bit of heat off [Clinton’s] own personal life.”
Wall Street also had to contend on Thursday with a steep plunge in Latin American stock markets, on rumors that Venezuela will become the latest country to devalue its currency.
Venezuelan shares dove 9%. Mexican stocks sank nearly 3%.
Earlier, Asian stock markets had closed mixed.
In currency trading the dollar slipped against the Japanese yen, even as the bond market benefited from safe-haven buying.
The yield on the 30-year Treasury bond fell from 5.55% Wednesday to 5.51%--the lowest since the Treasury began regular sales of the bonds in the late 1970s.
The dollar was weak despite bonds’ gains because Japanese authorities continue to threaten to intervene to help bolster the value of the yen, which recently hit an eight-year low against the dollar.
The dollar closed at 143.19 yen in New York.
Haruhiko Kuroda, director-general of the Finance Ministry’s international bureau, said the yen, which has rallied more than 2% this week, is still too weak and “should be further corrected.” He said Japan will sell dollars “at the appropriate time as necessary.”
Among Thursday’s highlights:
* Tech stocks were pressured after Merrill Lynch analyst Thomas Kurlak downgraded Intel. Among other tech issues, IBM lost $1.88 to $128.06 and Compaq eased 31 cents to $35.88. But Dell soared $4.19 to a record $122.13.
* Financial stocks fell sharply amid speculation that struggling nations in Latin America might devalue their currencies like Russia did earlier in the week.
American Express slid $3.88 to $97.13, J.P. Morgan fell $3.69 to $122.81, and Travelers fell $2.13 to $56.06.
Some insurance stocks, however, gained in the wake of AIG’s bid for SunAmerica. Lincoln National surged $1.13 to $93.69. Loews rose 31 cents to $88.94.
* GM lost $2.06 to $66.50 and Ford dropped $2.13 to $48.88. Both companies have big operations in Latin America.
Market Roundup, D6
