Dow loses 207
Grim prospects forStar-Bulletin news services
Japan weigh on U.S.
NEW YORK -- The Dow industrials plunged more than 2 percent today, hitting a three-month low, as an increasingly grim outlook on Japanese recovery efforts spurred another jittery exodus from world stock markets.
The Dow Jones industrial average sank 207.01 points to close at 8,627.93, its biggest point loss since early January and the lowest finish since March 13. The 2.4 percent loss represents the fifth largest point-drop ever.
Today's loss sliced the Dow's gain for 1998 to 9.1 percent, down from a peak of 16.5 percent at May 13's record close of 9,211.84.
Declining issues beat advancers by a more than a 3-to-1 margin on the New York Stock Exchange, with 737 up, 2,387 down and 412 unchanged. NYSE volume totaled 582.90 million shares, down from 631.64 million on Friday.
Broader stock indicators also tumbled as nervous currency traders sent the Japanese yen down to an 8-year low against the dollar, further complicating efforts to revive Japan's economy, the second biggest in the world.
The Standard & Poor's 500 fell 21.83 to 1,077.01, and the technology-heavy Nasdaq composite index dropped 29.30 to 1,715.75. The NYSE composite index lost 11.78 to 554.89, and the American Stock Exchange composite index sank 13.52 to 683.88. The Russell 2000 index of smaller companies fell 7.73 to 433.86.
As usual, the dollar's rise and the flight from stocks served as another boon for the Treasury bond market, where long-term interest rates sank to another all-time low. The benchmark 30-year Treasury bond rose 1 1/32, or $10.31 per $1,000 bond, to 107 20/32. The yield fell 7 basis points to 5.59 percent -- the lowest level since the Treasury began regular sales of the securities in 1977.
"For the short term, defined as the next few months, bonds will be a pleasant place to be," said Peter Anderson, chief investment officer at American Express Financial Advisors, which oversees $200 billion. "U.S. interest rates are apt to decline further."
Anderson expects U.S. stocks to continue to drop, sending the S&P 500 down 11 percent to as low as 970. For investors who must stay invested, the money manager said energy producers and utilities -- companies whose big dividends and steady businesses reduce their risk -- are the best bet.
A rising dollar makes the return on U.S. investments even more attractive in other currencies, drawing even more money away from Japanese markets. However, a strong dollar can also hurt U.S. companies by making American products more expensive overseas and eating away at the value of the revenues those companies manage to generate abroad.
Notably, 3M was the biggest decliner among the Dow 30 after the diversified manufacturer warned that its profits are being hurt by the weakness in Asia and the unfavorable exchange rates.
Key stock indexes in both Hong Kong and Bangkok tumbled nearly 6 percent, while in Tokyo, the Nikkei stock average fell 1.3 percent. In Europe, Frankfurt's DAX index sank 2.5 percent and London's FTSE 100 lost 0.9 percent.
Elsewhere in Asia, South Korea's main index fell 4.8 percent, the Philippines' ended 4.5 percent lower, Malaysian shares dropped more than 4 percent, and Singapore's lost 3.5 percent.
Bloomberg News and the Associated Press
contributed to this report.