DOW PLUNGES 160 POINTS IN 5TH-WORST DROP : INVESTORS FEAR HOT ECONOMY.Byline: David Barboza The New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of Times Stocks plunged Thursday in the steepest sell-off since July as interest rates rose sharply and caused more investors to question whether the market had become too expensive. 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. plummeted 160.48 points, or 2.3 percent, to close at 6,878.89. While the drop was the fifth-largest point decline in Dow history, it did not even rank in the top 50 declines in percentage terms. The drop in stock prices was widespread, with declining stocks beating advancing ones by almost 4-to-1 on the New York Stock Exchange New York Stock Exchange (NYSE) World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. . ``It was a very pervasive, sweeping decline,'' said Michael Metz Michael Metz (born June 16, 1964) is a former field hockey player from Germany, who won the silver medal at the 1988 Summer Olympics in Seoul, South Korea for West Germany. , chief investment strategist strat·e·gist n. One who is skilled in strategy. Noun 1. strategist - an expert in strategy (especially in warfare) strategian market strategist - someone skilled in planning marketing campaigns at Oppenheimer & Co., and a longtime long·time adj. Having existed or persisted for a long time: a longtime friend; a longtime resident of Detroit. longtime Adjective bear. ``It's the worst I've seen in months, and I think it's the beginning of something more serious, because valuations are stretched to the limit.'' Yet even as most stock indexes fell Thursday, the mutual fund industry was reporting that cash inflows into equity funds remained strong in February. The Investment Company Institute, a trade group, said equity funds netted $19.5 billion last month, well below the record January intake of $29 billion, but still the seventh-largest figure in history. Having broken the 7,000-point level last month in record time, with gains of more than 1,700 points, or about 32 percent, since in July, some believe that the Dow and the broader market - which is already in one of the longest bull runs in history - have been long overdue for a correction. And while few analysts were willing to declare the beginning of a bear market Thursday, several said the economy's continued strength was raising fears that inflationary pressures could lead to higher interest rates that would slow the economy and unhinge an ebullient stock market. Indeed, Thursday's decline seemed to have been set off by rising interest rates in the bond market following a report that retail sales this year had risen much more strongly than expected. As a result, many more analysts said the Federal Reserve Board almost certainly would raise short-term interest rates Short-term interest rates Interest rates on loan contracts-or debt instruments such as Treasury bills, bank certificates of deposit or commerical paper-having maturities of less than one year. Often called money market rates. at its policy meeting March 25. |
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