Markets Follow Dow Down After Big Fall
- By Jeannine Aversa
- Feb. 11 2000 00:00
NEW YORK -- The Dow Jones industrial average suffered its eighth-largest point decline ever Wednesday, skidding 258.44 points, with interest-rate worries pounding banking stocks while Microsoft Corp., the world's No. 1 company in market capitalization, fell on word of a new anti-competition probe.
The Dow fell 2.36 percent, to 10,699.16, which is nearly a three-month low. The broader Standard & Poor's 500 Index dropped 30.01 points, or 2.08 percent, to 1,411.71and the Russell 2000 index of small-capitalization stocks fell 1.48 points.
The slump on Wall Street was related in part to crude oil prices spiking up to $28.78 a barrel on the WTI index, near their highest levels since the 1990 Persian Gulf War.
Adding to the market's skittishness was news that hackers had managed to temporarily hobble some of the most high-profile web sites, including Internet media company Yahoo! Inc. and online auctioneer eBay Inc. Yahoo said Thursday most European web sites had not been hit by hackers. Yahoo's U.S. site was one of the worst hit in Monday's attacks.
"Microsoft is clearly not out of the woods yet, but I think the bigger reason for the drop is interest rates are now a clear and present danger again," said Chris Dickerson, analyst at Global Market Strategists Inc. "The market is overbought and when it is overbought, it becomes vulnerable to any news event. The hacker news was a catalyst."
The sell-off intensified after long bond yields surged on comments from U.S. Treasury Secretary Lawrence Summers, who indicated supply of the 30-year U.S. Treasury bond might not become as scarce as previously thought. Higher bond yields generally make fixed-income debt more competitive with stocks as investments.
Dragging down the Dow were Microsoft, which weakened 5-15/16 to 104 after the No. 1 software company was identified as the target of an antitrust probe by the European Union over its Windows 2000 operating system.
Falling even more was financial services giant American Express Co., which lost 6-5/8 to 156-3/8 amid general weakness among banking stocks.
The Nasdaq composite index, which had rallied early in the session on strong earnings from computer networking company Cisco Systems Inc., lost 64.35 points, or 1.45 percent, to 4,363.15. It had closed above the 4,400 mark for the first time Tuesday.
Yahoo gave up 10-13/16 to 362-5/16 and eBay lost 5-3/4 to 164 after the hacker news.
European stock prices were softer at midday Thursday, with growth sectors hurt and defensives helped by jitters over Wall Street and higher rates in Britain.
Retailers, consumer cyclicals, telecom, technology and media stocks were all weaker at midday.
At midday, the widely based Eurotop 300 index was down 0.44 percent, while the narrower Euro STOXX 50 index of pan-European blue chips was off 0.6 percent. Both had regained some ground from sharper losses in the morning.
Earlier Thursday, the steep falls on Wall Street had helped knocked back regional heavyweight Tokyo.
Tokyo's Nikkei 225 average closed at 19,710.02, down 1.49 percent, after briefly gunning over 20,000 Wednesday.
Hong Kong shares had a volatile day, dropping initially on the U.S. news, then rebounding.
The main Korean KOSPI index closed 1 percent lower at 966.18 and the technology-weighted Kosdaq down 0.6 percent at 245.69.