MARKETS BOUNCE; DOW DOWN 125 ON NEWS OF BRAZIL DEVALUING CURRENCY.Byline: Tom Wolf Bridge News U.S. stocks, after a harrowing first-hour dip, managed to cut early losses in half by the close Wednesday. 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 125.12 points, or 1.32 percent, to 9,349.56 on news of a devaluation devaluation, decreasing the value of one nation's currency relative to gold or the currencies of other nations. It is usually undertaken as a means of correcting a deficit in the balance of payments. of Brazil's currency. The Nasdaq, bolstered by a resilient technology group, posted a small decline of 3.43, or 0.15 percent, to 2,317.32. The Standard & Poor's 500 finished down 5.11, or 0.41 percent, to close at 1,234.40. The bulk of stocks, however, retreated, with 2,090 shares down on the NYSE NYSE See: New York Stock Exchange vs. 1,020 gainers. Volume was a heavy 929.3 million shares. On the Nasdaq, losers beat gainers 2,081 to 1,261 on volume of 1.19 billion shares. The market was down from the opening after Brazil effectively devalued de·val·ue also de·val·u·ate v. de·val·ued also de·valu·at·ed, de·val·u·ing also de·val·u·at·ing, de·val·ues also de·val·u·ates v.tr. 1. To lessen or cancel the value of. its currency, the real, by lowering the range it is allowed to trade. Brazil, the world's eighth-largest economy, gradually devalued the real last year, but Wednesday's move puts the trading band about 8 percent lower. In addition, Gustavo Franco Gustavo Franco is a Brazilian economist, born April 10, 1956. Son of Guilherme Arinos Lima Verde de Barroso Franco (a friend and assistant of President Getúlio Vargas, member of the first board of Directors of BNDES - the Brazilian National Development Bank) and Maria Isabel , Brazil's central bank president, resigned Wednesday. After plunging 261 points in the first hour, stocks made a steady recovery throughout the day before selling off modestly in the last half-hour. ``The early sell-off created a great buying opportunity,'' said Ciaran O'Kelly, managing director of equities at Salomon Smith Barney. But some analysts see more shock waves ahead for the U.S. market from Brazil and other troubled economies, such as Asia, Russia and the rest of Latin America. ``We see the risk (on the downside On the Downside is an EP by the San Diego, California band Counterfit, released by Alphabet Records in 2000. It was the band's first EP, recorded shortly after the members had relocated to San Diego from Fairfield County, Connecticut. ) being at least 25 percent,'' said Don Hays, director of investment strategy at Wheat First Butcher Singer. Financial stocks, particularly money-center banks, and cyclical stocks took the worst of the sell-off. Technology and consumer stocks fared better due to a smaller exposure to Latin America. CAPTION(S): Photo PHOTO (Color) Traders surround the post for Telebras, the Brazilian telephone company, shortly after the beginning of Wednesday's trading. The country's 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. sparked a huge sell-off at the opening of the trading day, prompting a drop in U.S. stocks. Richard Drew/Associated Press |
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