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The Honolulu Advertiser

Posted at 11:31 a.m., Tuesday, July 16, 2002

'Fed up' investors punish markets

Hawai'i Stocks
Updated Market Chart

By Amy Baldwin
Associated Press

NEW YORK Wall Street wobbled again today, dropping sharply at the opening, stabilizing on soothing words from Federal Reserve Chairman Alan Greenspan and then falling sharply again in late afternoon amid investors' continuing anxiety about the market's own dynamics.

The Dow Jones industrials closed its seventh straight losing session down more than 160 points, a slight improvement over an earlier loss of 232, while the tech sector gave up a respectable gain and also finished lower.

"People are just fed up. ... It is a very emotional market," said Barry Hyman, chief investment strategist at Ehrenkrantz King Nussbaum.

Investors remained very nervous after eight weeks of heavy selling, including big price swings yesterday, when the Dow fell as 439 before recovering to a loss of 45 by the close.

Today, the Dow finished down 166.08, or 1.9 percent, at 8,473.11. The Dow has fallen more than 900 points in seven straight losing sessions, four of which have been marked by triple-digit drops. The last time the Dow had a longer unbroken losing stretch was the eight days that ended Sept. 21, following the Sept. 11 attacks.

The market's broader indicators also stumbled lower today. The tech-heavy Nasdaq composite index slipped 7.34, or 0.5 percent, to 1,375.28. The Standard & Poor's 500 index fell 16.99, or 1.9 percent, to 900.94.

Greenspan told the Senate Banking Committee today that the economy is on its way to full recovery, although it will keep feeling the effects of last year's recession. Greenspan also said the Fed will not start raising interest rates until the economy shows further strengthening.

Greenspan's words temporarily heartened investors who have been worried about companies' second-quarter earnings and outlooks for the remainder of the year.

But investors were still mindful of their concerns about earnings and a series of corporate bookkeeping scandals, and they were unable to overcome their case of nerves as the afternoon wore on. Such worries have led to eight straight losing weeks.

At this point, Wall Street's huge losses are themselves helping to drive stocks lower, analysts said.

The market "tends to feed on itself on the downside just as it fed on itself on the upside for seven years," Hyman said.

Declining issues led advancers 4 to 3 on the New York Stock Exchange. Volume was moderate.

The Russell 2000 index, which tracks smaller company stocks, fell 1.81, or 0.4 percent, to 407.27.