박재훈투영인
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10 months ago
Nasdaq Sinks 3.4% As Market Staggers To Dismal Year End(Jan. 1, 2001)
Technology stocks retreated Friday, dragging the Nasdaq Composite Index down 3.4% and cementing 2000 as its worst year on record. Blue chips failed to extend a five-day run of gains, leaving the Dow Jones Industrial Average with its poorest one-year performance since 1981.The Nasdaq composite dropped 87.24 to 2470.52, ending the year down 39%. It was the index's worst year since the market measure was created in 1971, surpassing its 1974 drop of 35%.Meanwhile, the industrial average sank 81.91, or 0.8%, to 10786.85, closing down 6.2% for the year -- its first annual loss since 1990.Other major indexes finished lower. The Standard & Poor's 500-stock index fell 13.94, or 1%, to 1320.28. The New York Stock Exchange Composite Index sank 3.03 to 656.87, and the Russell 2000 Index of small-capitalization stocks fell 10.50, or 2.1%, to 483.53.Hopes that the market would finish 2000 on a positive note were dashed. The main indexes showed some early strength, but the Nasdaq composite retreated amid declines by the year's hard-hit tech bellwethers, including Cisco Systems , Microsoft , Intel , Yahoo and Dell Computer . The industrial average exhibited a lack of direction for most of the day before sinking in late trading.Internet stocks led the Nasdaq composite lower, with the Dow Jones Composite Internet Index dropping 6.5%. Most other tech shares were weak. The transportation sector got a boost from airline stocks, and retailers also advanced. The S&P retail index rose 1.1% as Dow components Home Depot and Wal-Mart Stores rose.Many on Wall Street are happy to put this year behind them. Technology stocks have been the biggest losers, dragging down Nasdaq composite in contrast with 1999's record surge of nearly 86%. The industrial average rose 25% last year."You have to remember that in 1999 the Nasdaq went into a manic phase," said Larry Wachtel, market strategist at Prudential Securities. "In the year 2000, we unraveled that manic phase. I have a hard time getting out the crying towels. ... We're back to sobriety here."Financial markets are closed Monday, giving investors another three-day weekend to catch their breath.The bond market closed early Friday ahead of the New Year's holiday, with bonds ending mixed . Bond prices posted solid gains in 2000, mostly due to a late-year rally as it became increasingly evident that the U.S. economy was slowing. Government securities are seen as a safe-haven investment during times of economic uncertainty or a stock-market slump. The 10-year note's yield fell more than a full percentage point in 2000 to 5.11% Friday, from 6.43% a year ago.The dollar was lower Friday. It made sharp gains against the yen this year, and also climbed against the euro. The U.S. currency rose 12% against the yen, while the euro dipped 6.4% against the dollar in 2000.Fears that the economy is slowing too quickly, hurting corporate profits as a result, have driven the market's performance in recent months. The tech sector felt little but pain for most of the year as the Internet bubble burst and investors adopted a more cautious stance. Defensive issues, including tobacco, energy, and health-care and pharmaceutical stocks, outperformed the broader market in 2000 amid the uncertainty.Dow component Philip Morris rose 91% this year. The S&P pharmaceutical index jumped 35% in 2000, and Merck gained 38%. Microsoft finished the year down 63%, and fellow tech bellwether Intel lost 28% this year. AT&T dropped 66%, and Internet stocks took a beating, with Yahoo! down 86%.The Dow Jones Composite Internet Index sank 66% for the year and is off 73% from its high. The Philadelphia Stock Exchange Semiconductor Index lost 18% and is off 58% from its high.The Nasdaq composite closed Friday off 51% from its March 10 high, while the industrial average lost a milder 8% from its high point on Jan. 14. The S&P 500 finished off 10% for the year and down 14% from its high March 24, but the NYSE Composite managed to finish up 1% for the year and off 3.1% from its record close Sept. 1.Alan Ackerman, executive vice president and market strategist at Fahnestock, said investors are weary after the tumultuous year on Wall Street. He said all eyes will be on the Federal Reserve to pull the economy -- and the stock market -- out of its slump. Hopes that the Fed would cut rates in December weren't realized, sending stocks sliding earlier in the month."The future of the market clearly depends on whether the Fed is going to be friendly to the economy," Mr. Ackerman said. "My outlook is cautiously optimistic until we know what the Fed is going to do. The world is in the midst of an economic slowdown, and it needs a catalyst. That catalyst may be the Fed lowering rates one or more times in the next year."Ricky Harrington, a technical analyst a Wachovia Securities, said the prospect that the Fed may cut rates in January, coupled with a bounce from the tech sector's heavy losses, could lift the market early next year. On Dec. 20, the Nasdaq composite hit its lowest close since March 1999 of 2332.78. But the cloudy economic outlook will continue to loom over the market."As for January and the early part of the year, I think there is likely to be a further recovery in the Nasdaq and many of these depressed areas," Mr. Harrington said. "But the year 2001 I think will still be a second bear market year for the Nasdaq. Stocks are still overvalued, and the economy is clearly heading into a slowdown or something worse."Outside the U.S., European markets closed mixed Friday, with Frankfurt's key index rising 1%. In the Asian-Pacific region, markets finished mixed as Tokyo stocks ended down 27% for the year. Year-end window dressing offered some support in the region.
