MARKET FALLS AGAIN; EDGY INVESTORS SEND DOW DOWN 1.2%.Byline: Eileen Glanton Associated Press Associated Press: see news agency. Associated Press (AP) Cooperative news agency, the oldest and largest in the U.S. and long the largest in the world. Stocks fell sharply Tuesday, extending the Dow industrials' worst losing streak since late March, as continued concerns about interest rates and Internet stocks Internet stock The equity security of a company engaged primarily in a business associated with the Internet. Also called dot-com. outweighed a sign of continued optimism about the U.S. economy. 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. fell 1.2 percent, dropping 123.58 points to close at 10,531.09. The Dow has now finished lower in four consecutive sessions, including a 174.61-point tumble Monday. Broader stock indicators also surrendered early gains to finish lower. The Standard & Poor's 500 fell 22.25 to 1,284.40, and the technology-heavy 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 fell 72.74 to 2,380.92. The Nasdaq is now 10 percent below its all-time record of 2,652.05, set April 26, the S&P 500 is down 6 percent from its May 13 record of 1,367.56 and the Dow is off more than 5 percent from its record of 11,107.19, also set May 13. Initially, stocks appeared poised for a rally Tuesday. The Conference Board reported that consumer confidence, a key indicator of future economic activity, rose in May for a record-setting seventh consecutive month. The report boosted the Dow nearly 100 points in early trading, as the market welcomed the latest sign of the economy's strength. Consumer sentiment is an important economic indicator economic indicator Statistic used to determine the state of general economic activity or to predict it in the future. A leading indicator is one that tends to turn up or down before the general economy does (e.g. because consumer spending Consumer demand or consumption is also known as personal consumption expenditure. It is the largest part of aggregate demand or effective demand at the macroeconomic level. accounts for about two-thirds of the nation's overall economic activity. Adding to the upbeat evidence was a separate report by a manufacturing group forecasting stronger growth in the second half of this year with few inflationary pressures. But by midafternoon, much of the market's enthusiasm had evaporated evaporated reduced in volume by evaporation; concentrated to a denser form. . Scott Bleier, chief investment strategist at Prime Charter Ltd., said the sell-off was a long time in the making. ``This market is suffering the slings and arrows of two weeks' worth of news,'' he said, citing Treasury Secretary Robert Rubin's resignation and the Federal Reserve's warning that it may raise interest rates in coming months. ``Those factors didn't immediately hurt the market, but they have now come to bear,'' he said. Interest-rate concerns provided a backdrop for the stock market throughout last week, as stocks shifted in a narrow range with light volume. The threat of higher rates prompted a subtle shift from high-priced technology and growth stocks to more conservative issues like utilities and cyclical stocks Cyclical Stock A stock that rises quickly when economic growth is strong, and falls rapidly when growth is slowing down. Notes: An example is the automobile market, because as growth slows in the economy consumers have less money to spend on new cars. . That trend continued Tuesday, as investors punished the high-flying Internet stocks most sharply. Those companies, few of which earn profits, are perceived as a riskier bet if higher interest rates start cutting into corporate earnings. The sector continued to slide Tuesday, led by well-known stocks like Yahoo!, down $10.875 to $127, and Amazon.com, down $6 to $111.50. Even Lycos, which rose after Credit Suisse First Boston Credit Suisse First Boston was originally the trading name of the Financière Crédit Suisse-First Boston, a London-based 50-50 investment banking joint venture formed in 1978 between the First Boston Corporation and Credit Suisse. gave the stock a ``buy'' recommendation, ended $1.25 lower at $96.50. A lukewarm debut - by Internet standards See Internet Engineering Task Force. - from Barnesandnoble.com illustrated the nervousness. The online bookseller, which was priced Monday at $18 per share, rose to $23. ``People are becoming more selective in their Internet holdings,'' said Alan Ackerman, senior vice president at Fahnestock & Co. ``They want to hold a handful of selective stocks rather than a plethora that ran up just because they have `dot com' in their name.'' |
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