Nasdaq hits lowest level in more than a year

By LISA SINGHANIA

Associated Press

NEW YORK — The Nasdaq composite index fell to its lowest level in more than a year today after the Federal Reserve indicated it was worried about the slowing economy, but declined to cut interest rates.

Blue chips also tumbled when Wall Street, which had rallied on hopes of a rate cut, again focused on earnings and fears of a possible recession. Analysts said investors were especially spooked by the Fed’s recognition that the economy may be slowing too much, too fast.

"The market’s worried about earnings, and this tells us that it isn’t going to get better anytime soon," said Gary Kaltbaum, a technical analyst at JW Genesis. "As soon as the Fed mouthed its words about the economy, stocks — especially the Nasdaq which is already in a downturn — got whacked again."

The Nasdaq closed down 112.81 to 2,511.71, a 4.3-percent drop, its lowest level since August 1999 and the index’s sixth straight losing session.

The Dow Jones industrial average fell 61.05 to 10,584.37, a nearly 0.6 percent loss, after gaining as much as 139 points earlier in the session.

The Standard &amp Poor’s 500 index fell 17.14 to 1,305.60, a loss of more than 1 percent.

Trading was heavy and extremely volatile after the Fed announcement, which cut short a morning rally in technology and what would have been the second straight session of blue chip gains.

"Financial stocks and Microsoft did not do well and Wal-Mart’s down," said Arthur Hogan, chief market analyst at Jefferies &amp Co. "We got a little present from (Federal Reserve Chairman) Alan Greenspan, and I guess we wanted a bigger one. Now we’ve got to concentrate on earnings again."

Wal-Mart was off $2.56 at $48. Target Corp. fell $2.94 to $28.75, a 9 percent drop. Morgan Stanley Dean Witter dropped 25 cents to $69 after rallying early in the day despite reporting earnings well below Wall Street estimates.

A gloomy earnings forecast also sent SBC Communications SBC down $6.75 to $46.56.

Technology issues dropped as well.

Microsoft was off $3.06 at $44.75 on reports the company plans to cut costs as it boost some salaries. Sun Microsystems dropped $1.63, or 5.7 percent, to $26.94.

"The stock market right now is jumping around based on worries about the economy and earnings," said Robert Christian, chief investment officer at Wilmington Trust. "I think we’re in for a choppy period that’s going to extend into next year."

In its statement today, the Fed indicated it was shifting its focus to economic weakness, rather than inflation because of "eroding consumer confidence" and "substantial shortfalls in sales and earnings."

Todd Clark, head of listed trading at WR Hambrecht, said the market’s negative reaction reflected disappointment by many on Wall Street who had been banking on an interest rate cut, as well as fears about where the economy is headed. The market views lower rates as necessary to stimulate the slowing economy and jump-start slumping corporate profits.

"The market got a little ahead of itself in expecting an interest rate cut right away," Clark said. "We didn’t get the cut but … to go from saying there is a risk of inflation to a risk of recession is as aggressive as the Fed’s going to get."

Advancing issues and decliners traded nearly evenly on the New York Stock Exchange, where volume came to nearly 1.59 billion shares, compared with 1.44 billion at the same point Monday.

The Russell 2000 index fell 4.47 to 458.78.

Overseas, Japan’s Nikkei stock average fell 2.4 percent. Germany’s DAX index was up 1.4 percent, Britain’s FT-SE 100 was up 0.8 percent, and France’s CAC-40 rose 1.2 percent.

Copyright ©2000 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

Talk to us

> Give us your news tips.

> Send us a letter to the editor.

> More Herald contact information.

More in Local News

A Mukilteo Speedway sign hangs at an intersection along the road on Sunday, April 21, 2024, in Mukilteo, Washington. (Ryan Berry / The Herald)
Long live the Speedway! Mukilteo’s main drag won’t be renamed

The public shot down the mayor’s idea to change the name: 77% voted ‘No’ in an online survey, with 95% opposed on Facebook.

Everett
Motorcyclist dies in crash on East Marine View Drive in Everett

Around 8 p.m. Tuesday, a motorcycle and a vehicle crashed into each other at the intersection of 11th street and East Marine View Drive.

Logo for news use featuring the municipality of Darrington in Snohomish County, Washington. 220118
Motorcyclist dies in crash on Highway 530

Jeremy Doyle, 46, was riding east near Darrington when he crashed into the side of a car that was turning left.

The Marysville School District office on Thursday, Aug. 31, 2023 in Marysville, Washington. (Olivia Vanni / The Herald)
‘Financially insolvent’ Marysville schools to get unprecedented oversight

Superintendent Chris Reykdal will convene a first-of-its-kind Financial Oversight Committee, he wrote in a letter Tuesday.

Woodside Elementary Principal Betty Cobbs on Monday, June 17, 2024 in Bothell, Washington. (Olivia Vanni / The Herald)
Everett’s first Black principal retires after 51 years

In her office, Betty Cobbs kept a black-and-white photo of herself at age 5: “I am right there, with dreams of becoming an educator.”

Junelle Lewis, right, daughter Tamara Grigsby and son Jayden Hill sing “Lift Every Voice and Sing” during Monroe’s Juneteenth celebration on Saturday, June 18, 2022. (Olivia Vanni / The Herald)
On Juneteenth: ‘We can always say that there is hope’

The Snohomish County NAACP is co-sponsoring a celebration Saturday near Snohomish, with speakers, music and food.

Rep. Rick Larsen speaks at the March For Our Lives rally on Saturday, June 11, 2022, in Everett, Washington. (Olivia Vanni / The Herald)
Larsen kickoff in Everett canceled over fear of pro-Palestinian protesters

The event had been scheduled to take place at the Scuttlebutt Brewing Taproom on Monday night.

After 3 years in jail, Camano murder suspect’s trial delayed again

In February 2021, prosecutors allege, Dominic Wagstaff shot and killed his father, shot his brother’s girlfriend and tried to shoot his brother.

The access loop trail on the Old Sauk Trail on Monday, May 27, 2024 in Darrington, Washington. (Ta'Leah Van Sistine / The Herald)
10 accessible trails to explore this summer in Snohomish County

For people with disabilities, tree roots and other obstacles can curb access to the outdoors. But some trails are wheelchair-friendly.

Everett NewsGuild members cheer as a passing car honks in support of their strike on Monday, June 24, 2024 in Everett, Washington. (Olivia Vanni / The Herald)
Everett Herald newsroom strikes amid layoffs

“We hope that people who live in these communities can see our passion, because it’s there,” said Sophia Gates, one of 12 Herald staffers who lost jobs last week.

A person wears a pride flag in their hat during the second annual Arlington Pride at Legion memorial Park in Arlington, Washington, on Saturday, July 22, 2023. (Annie Barker / The Herald)
Judge blocks parts of Washington’s new parental rights law

The South Whidbey School District is among the plaintiffs in a lawsuit over the law giving parents access to counseling records for their children.

Logo for news use featuring the municipality of Gold Bar in Snohomish County, Washington. 220118
Fire destroys Gold Bar home along U.S. 2

The sole resident was not home at the time of the fire. No one was injured.

Support local journalism

If you value local news, make a gift now to support the trusted journalism you get in The Daily Herald. Donations processed in this system are not tax deductible.