本文发表在 rolia.net 枫下论坛September 23, 2002
Nasdaq Hits 6-Year Low as Economic Data Rattles Market
By JONATHAN FUERBRINGER - WSJ
Under pressure from weak economic and profits news, declining markets abroad and worries about a war with Iraq, the Nasdaq composite index dropped to a six-year low today while the two other major stock indexes fell to their lowest levels since the overall market hit a five-year low in July.
The Nasdaq was off 28.70 points, or 2.4 percent, to 1,192.39, in afternoon trading, its lowest level since September of 1996. The Dow Jones industrial average was down 125.12 points, or 1.6 percent, to 7,860.90. It is now just 158.56 points from its four-year low of 7,702.34, reached on July 23. The Standard & Poor's 500 stock index fell 12.62 points, or 1.5 percent, to 832.82 and is only 35.12 points from its five-year low of 797.70, also reached on July 23.
Stocks of the major stock indexes in Europe were down 3 percent or more.
As the stock market continued to tumble, interest rates moved even lower, as some investors sought refuge in bonds while others were betting that the economy might slow even further. The yield on the Treasury's 10-year note fell to 3.68 percent, the lowest yield on a government security with a 10-year maturity since 1958, according to the Federal Reserve. The yield on the Treasury's 2-year note fell to a record low of 1.88 percent.
Among the negative news today was the report that the index of leading economic indicators, which is designed to give a sense how the economy will be performing in the months ahead, fell 0.2 percent last month, its third consecutive monthly decline.
In addition, several companies warned that their revenue and earnings would not be as good as expected. JDS Uniphase, which makes parts for fiber optic equipment, said third-quarter sales would be $190 million to $200 million, down from a earlier forecast of $210 million. Its stock dropped 6 percent to $2.01 in afternoon trading. Nucor, the steelmaker, said profits in the third quarter would be 45 to 50 cents a share, well below the consensus forecast of 77 cents a share collected from Wall Street analysts by Thomson First Call. Nucor stock plunged 16.6 percent to $40.85.
The threat that all three major market gauges could fall to new lows comes as Federal Reserve policymakers are to meet tomorrow to discuss interest rates. A rate cut is not expected, however.
Just a few months ago, the main worry for American investors was the slowness of the economic recovery and its effect on corporate earnings.
Now that there are more signs that the recovery is weaker than expected and signals that optimistic earnings expectations for the third quarter are fading, the list of concerns is growing.
"There are some not-trivial risks out there," said Bernie Schaeffer, chairman of Schaeffer's Investment Research in Cincinnati, Ohio. And those risks, he added, "put the burden of proof on the economic fundamentals to prove the bullish case for the stock market, and I don't see it."
There is talk of war with Iraq, which helped send the price of crude over $30 to $30.82 a barrel today, its highest price since February 2001. At the same time, the tension in Israel has heightened with the siege of Yasir Arafat's headquarters in Ramallah.
Japan's financial markets were closed for a holiday today, but when they reopen tomorrow they will be faced with the aftermath of the spectacular failure of a government bond auction on Friday to attract enough bids for all of the bonds being sold. The failure was another sign of lack of confidence in the government, analysts said. After the bond auction, Japan's prime minister, Junichiro Koizumi, delayed until October announcing new proposals to help the economy.
Europe is having trouble getting its economies going. In Germany, Chancellor Gerhard Schröder won just a narrow victory on Sunday.
And in Brazil, stocks and bond prices and the currency are falling as new political polls show that Luiz Inácio Lula da Silva of the Workers' Party is in striking of winning the election for president in the first round. Brazil has just gotten a $30 billion aid package from the International Monetary Fund and investors want the the current government's candidate to assure that Brazil will stick to plans to pay its debt and revive its economy.更多精彩文章及讨论，请光临枫下论坛 rolia.net
Nasdaq Hits 6-Year Low as Economic Data Rattles Market
By JONATHAN FUERBRINGER - WSJ
Under pressure from weak economic and profits news, declining markets abroad and worries about a war with Iraq, the Nasdaq composite index dropped to a six-year low today while the two other major stock indexes fell to their lowest levels since the overall market hit a five-year low in July.
The Nasdaq was off 28.70 points, or 2.4 percent, to 1,192.39, in afternoon trading, its lowest level since September of 1996. The Dow Jones industrial average was down 125.12 points, or 1.6 percent, to 7,860.90. It is now just 158.56 points from its four-year low of 7,702.34, reached on July 23. The Standard & Poor's 500 stock index fell 12.62 points, or 1.5 percent, to 832.82 and is only 35.12 points from its five-year low of 797.70, also reached on July 23.
Stocks of the major stock indexes in Europe were down 3 percent or more.
As the stock market continued to tumble, interest rates moved even lower, as some investors sought refuge in bonds while others were betting that the economy might slow even further. The yield on the Treasury's 10-year note fell to 3.68 percent, the lowest yield on a government security with a 10-year maturity since 1958, according to the Federal Reserve. The yield on the Treasury's 2-year note fell to a record low of 1.88 percent.
Among the negative news today was the report that the index of leading economic indicators, which is designed to give a sense how the economy will be performing in the months ahead, fell 0.2 percent last month, its third consecutive monthly decline.
In addition, several companies warned that their revenue and earnings would not be as good as expected. JDS Uniphase, which makes parts for fiber optic equipment, said third-quarter sales would be $190 million to $200 million, down from a earlier forecast of $210 million. Its stock dropped 6 percent to $2.01 in afternoon trading. Nucor, the steelmaker, said profits in the third quarter would be 45 to 50 cents a share, well below the consensus forecast of 77 cents a share collected from Wall Street analysts by Thomson First Call. Nucor stock plunged 16.6 percent to $40.85.
The threat that all three major market gauges could fall to new lows comes as Federal Reserve policymakers are to meet tomorrow to discuss interest rates. A rate cut is not expected, however.
Just a few months ago, the main worry for American investors was the slowness of the economic recovery and its effect on corporate earnings.
Now that there are more signs that the recovery is weaker than expected and signals that optimistic earnings expectations for the third quarter are fading, the list of concerns is growing.
"There are some not-trivial risks out there," said Bernie Schaeffer, chairman of Schaeffer's Investment Research in Cincinnati, Ohio. And those risks, he added, "put the burden of proof on the economic fundamentals to prove the bullish case for the stock market, and I don't see it."
There is talk of war with Iraq, which helped send the price of crude over $30 to $30.82 a barrel today, its highest price since February 2001. At the same time, the tension in Israel has heightened with the siege of Yasir Arafat's headquarters in Ramallah.
Japan's financial markets were closed for a holiday today, but when they reopen tomorrow they will be faced with the aftermath of the spectacular failure of a government bond auction on Friday to attract enough bids for all of the bonds being sold. The failure was another sign of lack of confidence in the government, analysts said. After the bond auction, Japan's prime minister, Junichiro Koizumi, delayed until October announcing new proposals to help the economy.
Europe is having trouble getting its economies going. In Germany, Chancellor Gerhard Schröder won just a narrow victory on Sunday.
And in Brazil, stocks and bond prices and the currency are falling as new political polls show that Luiz Inácio Lula da Silva of the Workers' Party is in striking of winning the election for president in the first round. Brazil has just gotten a $30 billion aid package from the International Monetary Fund and investors want the the current government's candidate to assure that Brazil will stick to plans to pay its debt and revive its economy.更多精彩文章及讨论，请光临枫下论坛 rolia.net