Closing Market Report

Star-Bulletin news services

Friday, May 14, 1999

Dow dives
193.87 on report

NEW YORK - Stocks plunged today, with the Dow Jones industrial average tumbling nearly 200 points, after the government's report of a steep rise in consumer prices renewed inflation worries and sent bond prices sharply lower. Analysts said the 0.7 percent rise in the consumer price index caught the market by surprise.

The Dow Jones industrial average dropped 193.87 points, or 1.75 percent, to close at 10,913.82, more than wiping out a 106.82-point gain yesterday that gave the Dow a new closing high of 11,107.19.

Broader stock indicators were sharply lower as well.

The Standard & Poor's 500 index fell 29.76, or 2.18 percent, to 1,337.80, and the Nasdaq market's composite index lost 54.14, or 2.1 percent, to 2,527.86.

Advancers beat decliners by a 7-to-2 margin on the New York Stock Exchange, with 670 up, 2,396 down and 462 unchanged. NYSE volume totaled 729.90 million shares vs. 791.44 million yesterday.

The NYSE composite index fell 12.90 to 638.45; the American Stock Exchange composite index dropped 11.58 to 788.81; and the Russell 2000 index of smaller companies fell 7.71 to 443.13.

The Labor Department said the April jump in the CPI was the largest monthly gain in nearly nine years.

The report was especially jarring following yesterday's wholesale-price report, which suggested inflation was subdued.

"The CPI is usually not out of line with that number," Barry Hyman, senior equity analyst at Ehrenkrantz King Nussbaum.

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