Roller-coaster Dow leaves markets braced for turmoil
Tuesday 01 April 1997
By the close last night, the Dow Jones Industrial Average was off by a dizzying 157.11 points, or 2.3 per cent, at 6,583.48. The fall, which computerised trading curbs failed to halt, came on the heels of the index's 140-point loss last Thursday.
While some analysts continued to argue that the return of the bear to the Wall Street represented no more than the correction that many had been expected, others were sounding alarm bells. Any slippage beneath the psychologically-important 6,600 level could instil more generalised fears, if not investor panic.
The story was similar across the markets. The technology-heavy Nasdaq exchange was also hurting badly yesterday - it was off more than 15 points at midday. Dealers are bracing themselves for volatile trading today after shares plunged again on Wall Street yesterday. Equities are expected to take their cue from a US market that returned from the shorter American Easter holiday as nervously as it had entered the break.
After a 140-point fall last Thursday in New York, the Dow Jones index fell sharply in early trading yesterday as dealers banked on another rise in American interest rates following last week's quarter-point increase. The Dow was trading 107.64 points off at 6,632.95 in midday trading, having been 140.8 down at mid-morning.
Shares were especially nervous ahead of economic data this week that could shape perceptions about inflation, interest rates and the stock market's future health. Later today the March survey of manufacturing conditions from the National Association of Purchasing Management will be published, while on Friday the Labor Department releases the March employment report.
The slide resumed immediately after the opening bell yesterday, leading to an early activation of computerised trading curbs on the New York Stock Exchange. It was a similar story of pain elsewhere. The technology-heavy Nasdaq exchange was also hurting badly yesterday - off 28 at 1,221 by the close. Nor was there much help forthcoming from the bond market, where the yield on the benchmark 30-year Treasury bond, after steadying briefly in early trading, began to climb again. At last Thursday's close, the yield was at 7.08 per cent, its highest level since last September.
Once bond yields break through the 7 per cent barrier, investors often begin looking towards the bond market and away from equities as the best place for their dollars.
Most analysts continued to attribute the onset of market turbulence to last week's Federal Reserve decision to raise short-term interest rates by a quarter-point. There is still concern that further increases may be around the corner.
Fuelling that worry was additional data yesterday pointing to an overly healthy US economy. The Commerce Department reported that Americans' personal income jumped 0.9 per cent in February, the largest gain in nine months.
While spending grew by a much more modest 0.3 per cent - the smallest gain since for six months - it came after a full 1 per cent surge in January.
"The data will keep the market on the defensive," said Peter Cardillo of Westfalia Investments.
- 1 Tourist films plane's descent just metres above packed Caribbean beach
- 2 Kate Moss: Previously unpublished nude photo revealed by Mert and Marcus
- 3 Indian woman creates 'Marriage CV' after parents put her on dating site: 'Definitely not marriage material. Won’t grow long hair, ever'
- 4 World Book Day: Boy 'excluded' from school after dressing up as Fifty Shades' Christian Grey
- 5 Bad Jews poster 'censored' on London Tube
Tourist films plane's descent just metres above packed Caribbean beach
Indian woman creates 'Marriage CV' after parents put her on dating site: 'Definitely not marriage material. Won’t grow long hair, ever'
Becky Watts: Four appear in court charged with hiding body parts after teenager's death
Isis 'bulldozes' Nimrud: UNESCO condemns destruction of ancient Assyrian site as a 'war crime'
Professor Brian Cox brands astrology-believing Tory MP David Tredinnick an 'outlier on the spectrum of reason'
Nearly 100,000 of Britain's poorest children go hungry after parents' benefits are cut
Durham Free School: 'Creationism taught at' free school facing closure
End of the licence fee: BBC to back radical overhaul of how it is funded
Elif Shafak: Turkish author warns against rise of British nationalism
Most people think legal tax avoidance is just as wrong as illegal tax evasion, poll suggests
Nigel Farage promises Ukip will not 'stigmatise' would-be migrants – and says he wants 'everyone to speak the same language'
iJobs Money & Business
£13000 per annum: Recruitment Genius: This is an exciting opportunity to join ...
£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...
£12 - £15 Hourly Rate: Jemma Gent: In this role you will report to the Head of...
£8 per hour: Recruitment Genius: This Pension Specialist was established early...