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Dow Closes Barely Above 10,000 After Briefly Dipping Below That Level

Brian Louis

The stock market punctuated a ghastly week with a severe selloff, topped by the Dow Jones Industrial Average briefly dipping below the 10,000 late this afternoon before recovering to close slightly above that five-figure mark.

Major Indices INDEX CHANGE % VALUE Dow -266.90 -2.59% 10,019.71 S&P 500 -36.01 -2.81% 1247.41 Nasdaq -75.01 -2.73% 2731.83 Russell 2000 -4.62 -1.10% 414.69 TSC Internet -10.99 -1.64% 685.10 BOND CHANGE PRICE YIELD 30-Year Treasury 23/32 98 1/32 6.261% Market data as of: 4:21 PM EDT, Fri Oct 15 1999

The Dow fell below 10,000 around 3 p.m. EDT, bottoming at the 9998.18 level. The Dow hadn't traded below 10,000 since the spring.

Major stock proxies plunged out of the gate in the wake of hawkish comments last night from Federal Reserve Chairman Alan Greenspan and a higher-than-expected Producer Price Index reading. After bottoming, major averages stabilized, albeit sharply lower, and traded in a range through a large portion of the trading day. However, around 2:30 p.m., a new leg of selling slammed the market and sent the Dow and S&P 500 to their session lows before recovering a bit. As for the Nasdaq Composite Index and the Russell 2000, both of those gauges hit their session lows within the first half hour of trading.

The PPI news has refueled inflation fears and jitters that the Fed will raise rates in November.

Market Internals

Market breadth was dreadful.

New York Stock Exchange: 689 advancers, 2,381, decliners, 905.9 million shares. 11 new 52-week highs, 490 new lows.

Nasdaq Stock Market: 1,114 advancers, 2,823 decliners, 1.06 billion shares. 45 new highs, 234 new lows.

Sector Watch

Bank, brokerage, and paper stocks were notable among a host of losers. The Philadelphia Stock Exchange/KBW Bank Index tumbled 4.3%; the American Stock Exchange Broker/Dealer Index crumbled 4.8%; while the Philadelphia Stock Exchange Forest & Paper Products Index took a break from its recent runup and swooned: The index plunged 4.9%.

Bonds/Economy

The 30-year Treasury bond, after plunging in the wake of the release of the PPI numbers, recovered from its losses and rallied well into positive territory, as the sharp losses in the stock market led money to move to the haven of the bond market.

The core PPI, which excludes volatile food and energy prices, jumped 0.8% in September, while the overall PPI hopped 1.1%, well above economists' forecasts. According to a Reuters survey, economists expected the overall PPI to rise 0.5%, while excluding food and energy prices they projected PPI to rise 0.4%.

Next week the bond and stock market will get a look at the Consumer Price Index, a key inflation gauge.

International

In Europe, major markets closed significantly lower. London's FTSE slumped 2.2% to 5907.3, while France's CAC fell 1.3% to 4524.42 and Germany's Dax slumped 0.7% to 5184.23.

In Asia, key markets got hammered. Hong Kong's Hang Seng tumbled 1% to 12,299.08, while the Nikkei swooned 1.5% to 17,601.57.

Earlier...

3:15 p.m.: Dow Falls Below 10,000 but Quickly Rebounds; Still Down Almost 3% on the Session

The Dow Jones Industrial Average briefly broke beneath the 10,000 level this afternoon, as a new wave of selling seized the market. The Dow has recently rebounded and was recently modestly above 10,000.

Major Indices INDEX CHANGE % VALUE Dow -274.18 -2.67% 10,012.43 S&P 500 -35.21 -2.75% 1248.21 Nasdaq -82.09 -2.99% 2724.75 Russell 2000 -5.62 -1.34% 413.69 TSC Internet -32.15 -4.79% 663.94 BOND CHANGE PRICE YIELD 30-Year Treasury 16/32 97 26/32 6.292% Market data as of: 2:55 PM EDT, Fri Oct 15 1999

1:57 p.m.: Stocks Remain Solidly Lower as PPI, Greenspan Continue to Weigh on Market

Stocks swooned out of the gate and within a half hour of the opening bell, major stock proxies had registered their intraday bottoms.

Major Indices INDEX CHANGE % VALUE Dow -185.85 -1.81% 10,100.76 S&P 500 -23.81 -1.86% 1259.61 Nasdaq -54.78 -1.99% 2752.06 Russell 2000 -4.69 -1.12% 414.62 TSC Internet -20.28 -3.02% 675.81 BOND CHANGE PRICE YIELD 30-Year Treasury 6/32 97 17/32 6.307% Market data as of: 1:43 PM EDT, Fri Oct 15 1999

1:09 p.m.: Midday Musings: Stocks Hang in With Harsh Losses but Well Off Lows

11:56 a.m.: Stocks Pare Losses as Treasury Market Posts Gains

Major stock proxies have pared a sizable chunk of their earlier losses heading into the lunch hour on Wall Street, while the Treasury market has firmed in the face of strong wholesale inflation data.

Major Indices INDEX CHANGE % VALUE Dow -169.38 -1.65% 10,117.23 S&P 500 -23.60 -1.84% 1259.82 Nasdaq -57.43 -2.09% 2749.41 Russell 2000 -4.37 -1.04% 414.94 TSC Internet -22.86 -3.41% 673.23 BOND CHANGE PRICE YIELD 30-Year Treasury 8/32 97 18/32 6.297% Market data as of: 11:51 AM EDT, Fri Oct 15 1999

11:09 a.m.: PPI, Greenspan Remarks Lead to Ugly Session for Stocks

Make no mistake, it's still quite unattractive out there, but it's not heinous anymore.

Major Indices INDEX CHANGE % VALUE Dow -176.66 -1.7% 10,109.95 S&P 500 -24.21 -1.9% 1259.21 Nasdaq -59.57 -2.1% 2747.27 Russell 2000 -5.41 -1.3% 413.90 TSC Internet -25.93 -3.7% 670.36 BOND CHANGE PRICE YIELD 30-Year Treasury +13/32 97 24/32 6.293% Market data as of: 10:55 AM EDT, Fri Oct 15 1999

9:55 a.m.: Stocks Tumble at the Open After PPI Data, Greenspan Remarks

Indications for the stock market were bleak enough before the 8:30 a.m. EDT release of the September Producer Price Index thanks to hawkish words from Federal Reserve Chairman Alan Greenspan in a speech last night.

Major Indices INDEX CHANGE % VALUE Dow -219.09 -2.1% 10,067.52 S&P 500 -32.01 -2.5% 1251.41 Nasdaq -92.87 -3.3% 2713.97 Russell 2000 -8.73 -2.1% 410.58 TSC Internet -41.04 -5.9% 655.05 BOND CHANGE PRICE YIELD 30-Year Treasury +16/32 97 25/32 6.29% Market data as of: 4:20 PM EDT, Thu Oct 14 1999