Dow dives 513 points
The second-biggest point drop ever,
By Bruce Meyerson
to below 8,000, wipes out the year's gains
Associated PressNEW YORK -- The Dow industrials plummeted a near-record 512.61 points today, tumbling below 8,000 for the first time in seven months and more than wiping out all of this year's gains.
It was the second-largest point drop ever, closely trailing the record 524.26 points of Oct. 27, 1997, and just above the 508-point "Black Monday" swoon of Oct. 19, 1987, when the market had its biggest percentage fall, a tumble of 22.6 percent.
Today's loss was 6.37 percent, the biggest daily percentage drop since last October.
The Dow Jones industrial average, which rose 43 points in the opening minutes of trading, finished at 7,539.07. Trading was heavy but below last week's frenzied pace.
In the sharp sell-off that gained momentum in the final hour, the Dow gave up the last of this year's gains. It ended 1997 at 7,908.25. The last time the Dow closed below 8,000 was on Jan. 30.
Broader indicators also plunged and the Nasdaq composite index was registering its biggest point drop ever.
The Standard & Poor's 500 fell 69.71, or 6.78 percent, to 957.53. It is off 1.33 percent for the year to date.
The Nasdaq composite index dropped a whopping 140.45, or 8.57 percent, to 1,499.15. The technology-heavy index is now down 4.53 percent for 1998.
On the Big Board, declining issues routed advancers by more than 7 to 1, with 399 up, 2,887 down and 280 unchanged. NYSE volume totaled 914.7 million shares at the close.
The American Stock Exchange composite index fell 37.51, 6.22 percent, to 565.07 and is down 17.46 percent for the year. The Russell 2000 index of smaller companies dropped 20.59, or 5.74 percent, to close at 337.95 and is down 22.67 percent in 1998.
In last week's global stock market rout, the Dow plunged 481.97 points, or 5.6 percent, its biggest percentage drop for a calendar week since 1989.
At July's peak, when the Dow was at 9,337.97, it had been up 18.1 percent. The drop of 19.3 percent from the July record is the biggest retreat since a 21.2 percent slide triggered by the Persian Gulf crisis in the summer and fall of 1990.
In the heady bull market that began in October 1990 and saw the Dow nearly quadruple, setbacks were routinely viewed as buying opportunities. Lately, however, traders have been viewing any attempts at a recovery as a selling opportunity.
Doubts about Russia's economic and political stability kept pressure on financial markets around the world. Russia's Parliament today overwhelmingly rejected the appointment of Viktor Chernomyrdin as prime minister.
Share prices fell in Europe, undercut by Wall Street's sharp morning retreat. Major stock indexes fell sharply earlier in Hong Kong and Singapore, but Japan posted a modest gain after dropping to a 12-year low Friday.
In Europe, a key index of German stock prices closed down 2.3 percent and leading market gauges also finished lower in France, Italy, Switzerland and the Netherlands.
Markets in London, the largest in Europe, were closed for a holiday.
Hong Kong's key Hang Seng Index sank 5.7 percent in the first seven minutes of trading today and ended the day with a 7.1 percent decline, falling 554.70 points to 7,275.04.
In Singapore the benchmark index fell 28.83 points, or 3.25 percent, to a new low of 856.43 after ending below the 900-point level on Friday for the first time in 10 years.
However, stock prices rose on the Tokyo Stock Exchange, where the benchmark 225-issue Nikkei Stock Average gained 192.26 points, or 1.38 percent, to close at 14,107.89.
Elsewhere in Asia the key stock index in Taiwan fell 2.8 percent to finish at a 22-month low and prices fell 1.4 percent in Australia, but stocks ended up 1.8 percent in South Korea.
Across Asia, Europe and the Americas, many stock markets fell by big percentages last week. That left some people wondering if the year-old Asian financial crisis, and the recessions it has caused in regional powerhouses such as Japan and Hong Kong, could spread to the West and sour its economies.
Yesterday, Japan's chief economic planner, Taichi Sakaiya, proposed an emergency summit of major industrialized countries to address the chaos roiling world financial markets.
To make matters worse, the ruble's collapse in Russia has set off political and economic instability there.
In Hong Kong today, the Hang Seng Index seemed to fall sharply because the government has reduced its role in trading.
For two weeks, Hong Kong's government had been buying stocks to drive the Hang Seng Index to a level at which speculators who bet on stock prices falling would lose money.
On Friday, that aggressive government buying pushed trading volume to a record $10.1 billion. Traders estimated the government spent $9.1 billion.
Speculators today suddenly found it more expensive to bet against Hong Kong markets because of new measures taken by the Futures Exchange over the weekend to curb manipulation.