Stocks Drop Swiftly at Open but Stabilize
Renewed fears over the repercussions from the near-collapse of hedge fund
Long Term Capital Management
helped send stocks down early on.
The
Dow Jones Industrial Average
was down 71 to 7931, having fallen as low as 7889.99. The
S&P 500
was down 8 to 1035, while the
Nasdaq Composite Index
was down 14 to 1706 and the
Russell 2000
was down 3 to 367.
Safety, safety, safety. The 30-year Treasury bond was recently up 20/32 to 105 23/32, yielding 5.12%. Still, that was well off the long bond's best levels of the morning.
Yesterday, the Dow fell initially on profit-taking. But its eventual hefty losses were attributed in large part to the Long Term debacle. Financial-services concerns were slugged over fears of their exposure to Long Term.
A bunch of banks and brokerage firms from the U.S. and overseas are infusing $3.75 billion into the fund in return for a 90% equity stake in Long Term, a Connecticut-based hedge fund. The fund was founded by former
Salomon Brothers
TheStreet Recommends
bond big
John Meriwether
.
UBS
said yesterday it will take a third-quarter charge, with part of the blame for the hit placed on its exposure to Long Term.
Meanwhile, in the background is Washington. The
House Judiciary Committee
said yesterday it will vote on Oct. 5 or 6 whether to begin a formal impeachment inquiry against
President Clinton
. If the panel approves going forward with the inquiry, a vote before the full House could follow on Oct. 8 or 9.
Most Up at Open -- NYSE
Anglogold (AU) - Get AngloGold Ashanti Limited Report, up 1 1/4 to 13 3/8
:
Prudential Securities
upgraded the company to strong buy from accumulate.
Most Down at Open -- NYSE
Citicorp (CCI) - Get Crown Castle International Corp. (REIT) Report, down 2 3/8 to 97 1/2
.
Most Down at Open -- Nasdaq
NICE Systems ( (NICEY) NICEY ADR), down 13 1/16 to 16 3/4
: The Israeli company warned third-quarter earnings won't meet analysts' expectations.
