NEW YORK -- Blue-chip stocks engineered another stunning comeback on one of Wall Street's busiest days ever, but broader stock market indicators stumbled at home and abroad today as the U.S. dollar continued to lose ground. The Dow, off 274 points,
pares loss to 9, but the
Nasdaq falls another 43The Dow closed off 9.78 points at 7,731.91 after dipping 274 points -- 67 points above this year's low of 7,400 set Sept. 1.
Broader stock indicators, which were again taking a much bigger bruising than the Dow 30, ended lower. Technology, Internet and financial stocks suffered some of the biggest losses.
The technology-heavy Nasdaq composite index was down 43.49 at 1,419.12.
At one point, the index traded below 1,400 for the first time in 16 months. The index, which is populated by thousands of small companies, has plummeted nearly 250 points in just four days.
The Standard & Poor's 500 index was down 11.24 at 959.44, threatening to break below early January lows.
Decliners outnumbered advancers by more than a 4-to-1 margin on the New York Stock Exchange, where volume came to a blistering 1.1 billion shares, compared with 965.5 million yesterday.
The NYSE composite index was down 7.48 at 477.20, and the American Stock Exchange composite index fell 22.02 at 563.75. The Russell 2000 lost 11.96 to end at 310.27.
The 30-year Treasury bond sank 2 9/16 points to 107 15/32, with the yield jumping to 5.01 percent from 4.87 percent late yesterday.
Analysts attributed the Dow's recovery to investors who were dismissing the day's jitters and instead looking for cheap stocks.
"If you think that the world is not going to end, then you have big bargains out there," said Charles Pradilla, chief investment strategist at SG Cowen Securities Corp., a New York investment firm.
Analysts attributed the selling frenzy to this week's sudden nose dive by the dollar in currency trading.
The dollar fell sharply again today after sliding 8.1 percent yesterday against the Japanese yen, the biggest one-day drop in a quarter century.
In New York trading today, the dollar was at 119.05, down from 120.25 yesterday.
Hedge funds, secretive ventures that invest for wealthy clients, were said to be unloading some of their riskier bets on the dollar, weighing down dollar-denominated investments including stocks and Treasury bonds. With the dollar dropping, there also is less incentive for foreigners to invest in U.S. stocks and bonds.
"Everybody's ratcheting down their expectations for all stocks," said Tim Stevenson, a money manager with First Union National Bank's Capital Management Group, which oversees $100 billion. "We're in an earnings recession."
Goldman, Sachs & Co. analyst Abby Joseph Cohen today cut her earnings estimates for S&P 500 companies to reflect "more subdued expectations for global growth in 1999," after "unusual developments in the second half," of this year, including trading losses at banks and brokerages from Japan's and emerging market slumps.
Prudential Securities analyst Ralph Acampora said the Dow could sink as low as 6,500, from a bottom of 7,400 earlier. Acampora, a longtime bull, abruptly turned bearish on Aug. 4.
Overseas stock markets also plummetted today.
Tokyo's benchmark Nikkei stock index of 225 issues fell 799.55 points, or 5.78 percent, to close at 13,026.06. Yesterday it gained 6.17 percent, or 803.97 points -- its second-largest points gain this year. Today's slide in the Nikkei was the largest single-day points fall since 846.75 points last Dec. 19.
In Europe, leading stock market averages all fell, but closed above the lows of the day. Key indicators dropped 2.7 percent in London, 4.4 percent in Paris and 4.7 percent in Frankfurt, Germany.
Yesterday's surge by the Nikkei was spurred by optimism that Japan will fix its fragile banking system and spend more money to lift its slumping economy.
But today's plunge came when many stock investors came to question the plan, said Fumikazu Onishi, a strategist with Nikko Securities.
"People began to question how effective the proposed steps will be when implemented, though they contain stricter disclosure requirements for banks and other measures better than now," Onishi said.
Onishi said the wild fluctuations in recent yen-dollar exchange rates also dealt a big blow to Japanese exporting companies, dampening overall sentiment.
The Associated Press and Bloomberg News
contributed to this report.