BEARING DOWN; STOCKS SQUANDER RECORD RALLY.Byline: Deborah Adamson Daily News Staff Writer Bears are running rampant through Wall Street. With the possible resignation or impeachment impeachment, formal accusation issued by a legislature against a public official charged with crime or other serious misconduct. In a looser sense the term is sometimes applied also to the trial by the legislature that may follow. of President Clinton in the wings, the stock market has spent the past two sessions giving up Tuesday's gains, when issues surged on Federal Reserve Board Chairman Alan Greenspan's hints of an interest-rate cut. The Dow Jones industrial average Dow Jones Industrial Average The best known U.S. index of stocks. A price-weighted average of 30 actively traded blue-chip stocks, primarily industrials including stocks that trade on the New York Stock Exchange. plunged 249.48 points Thursday to close at 7,615.54, only recovering somewhat in the last hour of trading after falling as much as 345 points. The index of 30 blue-chip stocks went back into negative territory for 1998, down 4.39 percent for the year, after flirting with an overall gain as a result of Tuesday's historic 380-point rally. Exxon was the only Dow component to rise. The biggest losers were American Express American Express (NYSE: AXP), sometimes known as "AmEx" or "Amex", is a diversified global financial services company, headquartered in New York City. The company is best known for its credit card, charge card and traveler's cheque businesses. , 3M, Hewlett-Packard and General Electric. The broader indexes followed suit. The Standard & Poor's 500 Index fell 26.02 points to 980.18, with 406 companies losing ground, and is now up a mere 0.53 percent for the year. The Nasdaq Composite Index Nasdaq Composite Index An index that indicates price movements of securities in the over-the-counter market. It includes all domestic common stocks in the Nasdaq System (approximately 5,000 stocks) and is weighted according to the market value of each listed dropped 38.97 points to 1,585.58 and is up only 0.25 percent for the year. The stock market, already reeling from the threat of a global recession and weaker corporate earnings, took a further tumble with the uncertainty over America's leadership caused by Clinton's deepening political problems. Leaks about Independent Counsel Kenneth Starr's report to Congress and sliding approval ratings underscore the seriousness of his dilemma. A CBS News CBS News is the news division of American television and radio network CBS. Its current president is Sean McManus who is also head of CBS Sports. Current productions Current television shows
But while Clinton's problems dampened the market, the impact won't be long-lived, said Charles Carlson, contributing editor A contributing editor is a magazine job title that varies in responsibilities. Most often, a contributing editor is a freelancer who has proven ability and readership draw. of the Dow Theory Dow Theory A theory which says the market is in an upward trend if one of its averages (industrial or transportation) advances above a previous important high, it is accompanied or followed by a similar advance in the other. Forecasts newsletter in Hammond, Ind. ``Too much power is attributed to political events,'' he said. ``Ultimately, stock prices follow earnings, interest rates and inflation.'' Carlson believes corporate earnings signify trouble despite low interest rates and inflation. His concern was echoed by Charles Hill, director of research at First Call, a research firm that tracks analysts' earnings estimates. Hill said Asia, and especially Japan, are having a more serious impact on earnings than previously believed, with currency devaluation Currency devaluation A deliberate downward adjustment in the official exchange rates established, or pegged, by a government against a specified standard, such as another currency or gold. and the region's economic crisis making Asians less able to afford U.S. goods and services In economics, economic output is divided into physical goods and intangible services. Consumption of goods and services is assumed to produce utility (unless the "good" is a "bad"). It is often used when referring to a Goods and Services Tax. . Japan's recession makes matters worse because it is an important trading partner of - and investor in - many Asian nations, he said, adding, ``Until Japan gets its house in order, this is going to spiral down.'' Overall third-quarter earnings estimates have been cut from a 15.1 percent year-to-year gain at the start of the year to 0.8 percent currently, while fourth-quarter estimates have fallen from 19.1 percent to 11.6 percent. Carlson said that while Asia does not take up a major portion of sales at most American businesses, even a small decline hurts. Since corporate earnings have been strong in recent years, and Wall Street builds on a continuing expectation of that strength as businesses have to beat estimates every quarter, even a small hit will make them miss earnings expectations. Computer-chip giant Intel was a bright spot Thursday. After the market closed, it announced third-quarter sales will rise 10 percent from the second quarter due to unexpectedly strong demand in North America and Europe. Analysts expect Intel shares to rise today along with other tech stocks. But the overall market will go lower, said Richard McCabe, chief market analyst at Merrill Lynch. Low inflation, the possibility of an interest-rate cut and a strong bond market are outweighed by global economic woes, deflation worries, weaker corporate earnings and a slowdown in the U.S. economy. Despite the doom and gloom doom and gloom n. Gloom and doom. doom  -and-gloom adj. , mutual fund redemptions have been relatively small, according to AMG AMG All Music Guide (music website)AMG All Media Guide (group of media websites) AMG All Movie Guide (Movie website) AMG Arzneimittelgesetz (German Law) Data Services, an Arcata firm that tracks money flows of 12,300 funds with a total value of $4 trillion. For the week ended Wednesday, stock mutual funds saw an increase of $1.4 billion. CAPTION(S): Photo, 2 Charts PHOTO (Color) Traders watch falling issues at the NYSE NYSE See: New York Stock Exchange as a live broadcast of President Clinton airs overhead. Bebeto Matthews/Associated Press CHART: (1) BEARS RULE Thursday's Dow trend in 15-minute intervals (2) DOW THE LAST 15 DAYS SOURCE: Bloomberg News Dionisio Munoz/Daily News |
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