Stocks End Lower; Dow Down 0.64
Oct. 05, 1999
NEW YORK (AP) _ Stocks fell today in volatile trading after the Federal Reserve decided against raising interest rates again but left open the possibility of a third rate hike later this year.
The Dow Jones industrial average closed 0.64 lower at 10,400.59, having swung from a 106-point gain to a 124-point loss over the final two hours.
Broader stock indexes also turned lower in the afternoon, cresting just as the Fed was set to announce the outcome of its latest meeting on inflation and interest rate strategy.
Fed officials, faced with a booming economy but no signs of inflation, decided not to raise interest rates, but shifted their policy bias from neutral toward a possible rate increase in the coming months.
Stocks had rallied Monday amid expectations the Fed would leave rates unchanged, but the policy shift dampened hopes that the central bank wouldn't try to slow the economy any further to combat inflation.
Telecommunications stocks dominated the most active list amid news that MCI WorldCom had sealed an agreement to acquire long-distance rival Sprint for $115 billion in what would be the largest corporate takeover in history.
MCI WorldCom fell 6 percent as the most active Nasdaq issue, while Sprint fell more than 3 percent in heavy trading on the NYSE. But among other leading telecom names, AT&T rose 3 percent on the NYSE to help bolster the Dow.
American Express also cushioned the Dow after the company announced plans to launch a new brokerage unit with online trading and access to financial advisers.
Overseas, Japan's Nikkei stock average rose 0.12 percent, Germany's DAX index rose 1.59 percent, Britain's FT-SE 100 rose 0.52 percent, and France's CAC-40 rose 1.26 percent.