Yesterday has been widely touted as the moment that US markets well and truly entered bear territory...
Yesterday has been widely touted as the moment that US markets well and truly entered bear territory. Wall Street had to acknowledge that it wasn't just the new economy taking a hammering but the old as well.
Among the old economy casualties were tobacco company Philip Morris as well as drugs groups Merck and Johnson & Johnson. There seems to be little shelter from declining stocks anywhere at the moment.
Wall Street is pointing the finger of blame at the Federal Reserve's decision earlier in the week to cut US interest rates by just half a point when it had been expecting a bigger cut.
To worsen matters, few onlookers can see a recovery in the short term. Companies' lower earnings expectations mean shares, despite having slumped, still look expensive on traditional price/earnings multiples.
It wasn't all doom and gloom though as the technology-biased Nasdaq Composite actually squeezed out a gain. Technology bellwether Microsoft put in a reasonable performance. Clearly some investors think there are some bargains to be had. But the Nasdaq's rise pales beside the fact that it has fallen 60% in the past year.
The Dow Jones lost 97.52 points to 9589.48, the Standard & Poor's 500 shrank 4.56 to 1117.58 whilst the Nasdaq Composite recovered 67.47 to 1897.70.
Contrary to the global economic despair that's being ramped up, markets in Asia didn't actually fare too badly. In particular Japan's Nikkei posted its biggest weekly gain since July 1998, with overseas investors ploughing funds back into the economy, focusing on the bargains following the index's 36% decline this fiscal year. The Nikkei advanced 360.57 to 13,214.54, which means it has clawed back 8% for the week.
Hong Kong's Hang Seng eked out a 0.2% gain to 12,641.53. Property companies bounced back from the 9% loss that's hit their sector over the past three days.
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