Stocks dive, pushed by inflation fear

Dow falls 289 points

Nasdaq drops 152, to 8.2% loss for the week

The day the bears smiled

Qualcomm off $9.4375

GE down $7.6875

pharmaceuticals rally

Wall Street

January 29, 2000|By BLOOMBERG NEWS

NEW YORK -- U.S. stocks plunged yesterday as fresh inflation news sparked a wave of "sell" cries on Wall Street, with banks, manufacturing and technology companies bearing the brunt of the bad news.

The selling sank the Nasdaq composite index to its biggest weekly loss since August 1998 and knocked nearly 300 points off the Dow Jones industrial average.

The Nasdaq fell 152.49, or 3.77 percent, to 3,887.07. The Standard & Poor's 500 index lost 38.40, or 2.75 percent, to 1,360.16, and the Dow shed 289.15, or 2.62 percent, to 10,738.87.

Qualcomm Inc. and General Electric Co. led the decline. Declining issues outnumbered advancers by more than 2-to-1 on the New York Stock Exchange, where nearly 1.1 billion shares traded. On the Nasdaq, about 1.54 billion shares changed hands.

For the week, the Nasdaq lost 8.2 percent, its biggest weekly decline since Aug. 28, 1998, when Russia's economic crisis emerged. The S&P 500 fell 5.6 percent for the week and the Dow 4.6 percent.

Elsewhere on the broad market, the Russell 2,000 index sank 12.40 to 504.62; the Wilshire 5,000 index plummeted 378.09 to 13,017.60 for one of its worst one-day drops ever; the American Stock Exchange composite index dropped 14.56 to 868.24; the NYSE composite tumbled 14.95 to 611.81; and the S&P 400 midcap index fell 9.15 to 430.19.

The Sun-Bloomberg Maryland index of the top 100 Maryland stocks lost 6.90 to 240.09.

Through the first four weeks of 2000, the Wilshire 5000, which includes nearly all U.S. stocks, dropped 5.8 percent. That translates into a $910 billion loss in the value of U.S. stocks, from $15.8 trillion when the year began.

Qualcomm, the biggest gainer in the S&P 500 last year, dropped $9.4375 to $110.5625 yesterday, its third straight loss. The shares have fallen 37 percent so far this year.

GE, whose GE Capital unit is the largest nonbank finance company, fell $7.6875 to $134, and Citigroup Inc., the largest financial services company, lost $2.875 to $56.125.

Sixty-eight of 71 stocks in the S&P financials index declined. J. P. Morgan & Co. fell $7.5625 to $118.0625; Chase Manhattan Bank slid $4 to $76.6875; and Citigroup lost $2.875 to $56.125.

Fueling the selling were reports from the government showing that gross domestic product, inflation and employment costs all grew more than expected in the fourth quarter, increasing expectations that Federal Reserve policy-makers will begin a series of rate increases next week.

The Bloomberg U.S. Internet index sank 5.4 percent, its biggest decline in two weeks, as Amazon.com Inc., America Online Inc. and Yahoo! Inc. tumbled. AOL dropped $2.9375 to $58.8125, and Yahoo fell $24.125 to $313.25.

Amazon.com sank $5.25 to $61.6875 after saying it fired about 2 percent of its work force. Amazon has lost about $17 billion -- more than 40 percent of its market value -- since its high of $113 in December on concern that the company will continue losing money as it spends more on marketing and adding new products.

HNC Software Inc. lost $10.8125 to $91.25.

Intel Corp. dropped $4.125 to $94, and Oracle Corp. lost $4.4375 to $47.375.

Drug stocks rallied after President Clinton avoided direct criticism of the industry's pricing practices in his State of the Union speech Thursday night. Merck & Co. gained $2.25 to $76.38; Bristol-Myers Squibb Co. rose $2.0625 to $64.25; Glaxo Wellcome PLC rallied $1 to $52; and Johnson & Johnson climbed $4 at $84.50.

Biogen Inc. plunged $7.6875 to $92.

Atlantic Richfield Co. gained $2.8125 to $78.4375. BP Amoco PLC presented a new offer to win U.S. approval of the company's $35 billion buyout of ARCO, which prompted the Federal Trade Commission to postpone until Monday a vote on whether to challenge the merger. BP Amoco's American depositary receipts were unchanged at $54.125.

Bowater Inc. rose $2.875 to $53.875 after reporting a return to profitability.

Ericsson AB climbed $4.4375 to $70.0625 after saying it would split its shares 4-for-1. The world's third-largest maker of cellular phones also said fourth-quarter profit rose 33 percent.

Veritas Software Corp. soared $10.25 before closing with a decline of $3.75 to $154. The data storage-management software maker reported earnings that beat the average analyst's estimate and said it will split its stock 3-for-2. Seagate Technology Inc., which owns 33 percent of Veritas, fell 50 cents to $40.1875.

Overseas, Japan's Nikkei stock average rose 1.17 percent; Germany's DAX index fell 0.84 percent; Britain's FTSE 100 fell 1.02 percent; and France's CAC-40 rose 0.75 percent.

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