Arrow-right Camera

The Spokesman-Review Newspaper The Spokesman-Review

Spokane, Washington  Est. May 19, 1883
Clear Day 39° Clear

Wall Street Pulls Out Of Nose Dive

Associated Press

The final tally made it look pretty dull, but Wall Street took investors on yet another wild ride Friday, with the Dow Jones industrial average losing as much as 177 points only to finish with a loss of just 6.

The Dow was down nearly 125 points at 7,769 with about 30 minutes left to the session, but ricocheted back to 7,887.91 by the close, down 6.04 for the day and up 193.25 for the week.

Broader market indicators also rallied into the close, finishing with only modest losses.

The Nasdaq composite index was down about 32 points, or 2 percent, after an early technology sell-off triggered by a Merrill Lynch downgrade of Intel, but managed to repair about three-quarters of that damage by the end of trading.

Stocks were pressured from the outset by another weak day in the bond market, which was weighed down by a drop in the dollar’s value on foreign exchange markets. A strong dollar makes the payoff on Treasury bonds and other U.S. investments more valuable in other currencies.

“I’m not not sure the concern about the dollar wasn’t just an excuse rather than a fundamental problem,” said John Lynch, director of investment strategy at Interstate/ Johnson Lane in Charlotte, N.C. “People have made a lot of money in this market and they’re looking for reasons to take some money off the table.”

As bond prices fell, the yield on the 30-year Treasury - a key determinant of borrowing costs - rose toward its highest level since June. That weighed down the stock market, but coming on top of Thursday’s losses, the falling share prices quickly spurred some bargain hunting.

“Some of these stocks began trading at pretty attractive levels if you still believe the fundamental outlook is positive, which I do,” said Jim Weiss, deputy chief investment officer for equities at State Street Research and Management Co. in Boston.

“Because you’re at such lofty levels, no one wants to be left holding the bag, and people are alert for the first signs of trouble,” said Weiss. “But because the cash flows into the market are still very strong, the money’s got to be put to work. In the absence of any definitive bad news, portfolio managers are going to continue to buy stocks.”

Although the Dow finished nearly unchanged, the day’s gyrations were well within the spirit of what had been an unprecedented streak of volatility for the market.

The Dow had swung at least 100 points in each of the last five sessions, losing 247 points last Friday, gaining more than 100 points in each of the next three sessions, and then sliding 127 points on Thursday.

Before this Friday’s rebound, the Dow’s decline was very broad-based. Overseas markets also took a big hit on Friday amid renewed worries about economic conditions in the Pacific Rim and Europe. Tokyo’s Nikkei stock average fell 2.6 percent, Frankfurt’s DAX index fell 3.9 percent and London’s FT-SE 100 fell 1.5 percent.

The Spokesman-Review Newspaper

Local journalism is essential.

Give directly to The Spokesman-Review's Northwest Passages community forums series -- which helps to offset the costs of several reporter and editor positions at the newspaper -- by using the easy options below. Gifts processed in this system are not tax deductible, but are predominately used to help meet the local financial requirements needed to receive national matching-grant funds.

Subscribe to the Coronavirus newsletter

Get the day’s latest Coronavirus news delivered to your inbox by subscribing to our newsletter.



Annual health and dental insurance enrollment period open now

 (Courtesy Washington Healthplanfinder)
Sponsored

2020 has been a stressful year for myriad reasons.