Stocks End Lower; Dow Off 78.22
Jun. 10, 1998
NEW YORK (AP) _ Stocks fell sharply today, with worries about company profits preventing an enthusiastic response to a reassuring commentary by Federal Reserve chairman Alan Greenspan and a big drop in interest rates.
The Dow Jones industrial average erased an early 47-point loss, but slid over the final two hours to finish down 78.22 at 8,971.70, according to preliminary calculations. The Dow slipped 19 points on Tuesday after gaining 265 points the prior three sessions.
Broad-market indicators also sank toward the close even though a rally in the bond market sent long-term borrowing rates toward an all-time low.
Addressing a joint congressional panel, Greenspan said the inflation-wary Fed sees no immediate need to slow the economy with an increase in the central bank's lending rates.
Greenspan also said he expected the U.S. economy would slow in the coming months, but that it was hard to gauge how much of an impact the economic crisis in Asia will have.
Notably, Asian stock markets tumbled anew on Wednesday as the U.S. dollar climbed to a new seven-year high against the yen. Higher U.S. interest rates would only exacerbate the situation by drawing more investment capital away from Asia.
With no major economic reports due until Thursday and Friday, trading had been hesitant this week as investors awaited today's comments by Greenspan.
In Asia, Hong Kong's main stock index fell 4.9 percent, Korea's fell 4.3 percent, Malaysia's and Taiwan's fell 3.1 percent, and Japan's fell 1.2 percent. The main Thai index fell 5.2 percent to a 10 1/2-year low, while the main index in Singapore fell 4.4 percent to a 9 1/2-year low.
In Europe, Frankfurt's DAX index fell 0.1 percent and London's FT-SE 100 fell 0.5 percent.