NEW YORK -- U.S. stocks fell sharply this morning following drops on foreign markets as investors grew nervous about the outlook for more economic turmoil in Asia and new signs of trouble in Russia's economy. World markets tumble
But the Dow rebounds with a
late rally to end down just 27.16The Dow Jones industrial average fell as much as 142.99 points before noon to 8,820.74 -- its lowest level since late March. But it recovered strongly late in the day to close at 8,936.57.
The blue-chip barometer fell 150 points yesterday and has fallen for four straight sessions.
At one point today, the Dow, the Standard & Poor's 500 stock index and the Nasdaq composite index were down more than 1 percent in heavy trading before rebounding.
From Russia to Indonesia, new worries about economic troubles weighed on stock markets.
"No matter where you look this morning, there's bad news," said Kent Rossiter, senior investment adviser at Nikko Securities in Hong Kong.
The Hong Kong market fell more than 5 percent. Tokyo lost 1.4 percent and embattled Russian markets were off 7 percent today. On the London Stock Exchange, the blue-chip Financial Times-Stock Exchange 100-share index was off by 1.7 percent. Frankfurt's Dax index closed down 2.7 percent.
The Japanese yen fell further today, adding to seven-year lows reached Monday against the dollar. The weak yen helps Japan's exporters but could put pressure on currencies of other Asian countries.
In Indonesia, hundreds of customers pulled cash out of Indonesia's largest private bank for the sixth day, raising fears that the state would be forced to take it over.
Officials of Indonesia's new government and an International Monetary Fund team debated how to revive a $43 billion bailout package. The plan was suspended amid riots over price increases and student protests against the long rule of Suharto.
"This crisis has to be overcome," said Hubert Neiss, head of the IMF delegation. He said economic reforms cannot succeed without political stability.
Russia's Central Bank tripled its main interest rate to 150 percent today in hopes of keeping money in the country's financial markets. President Boris Yeltsin's government has had little success in recent days calming jittery markets. Foreign and domestic investors have been fleeing the Russian market.
Speculation is growing that Russia will need a rescue package from the IMF, similar to the ones arranged after Asia's financial crisis hit last year.
On Wall Street today, broad-market indicators also recovered from heavy losses despite the global market jitters.
Declining issues outnumbered advancers by a 5-to-2 margin on the New York Stock Exchange, with 2,202 down, 874 up and 458 unchanged. NYSE volume totaled 681.08 million shares vs. 529.31 million yesterday.
The S&P 500 fell 1.79 at 1,092.23, but the technology-heavy Nasdaq composite index gained 3.01 to end at 1,781.01. The NYSE composite index lost 2.33 at 563.93, and the American Stock Exchange composite index fell 11.49 at 708.84. The Russell 2000 index of smaller companies dropped 4.82 at 450.26.
The Dow reached a record 9,211.84 on May 13, but broader market indicators have been in the doldrums since late March over concerns that stocks prices had reached unrealistic levels after rallying almost continuously for two months.
The price of the Treasury's main 30-year bond, meanwhile, was down 3/32 point, or $94 cents per $1,000 in face value, by late afternoon, while its yield rose to 5.84 percent from 5.83 percent late yesterday.