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Ministers eye markets
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April 16, 2000: 6:04 p.m. ET
Friday's stock swoon a concern to delegates; all eyes on Monday's open
By Staff Writer M. Corey Goldman
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WASHINGTON (CNNfn) - They have downplayed it as best they could, but Friday's U.S. stock market turmoil is weighing on discussions between ministers and central bankers at this weekend's International Monetary Fund and World Bank meetings.
U.S. Treasury Secretary Lawrence Summers Saturday downplayed the stock market correction, making clear the he and the rest of the Group of Seven industrialized nations were focused on the fundamentals of their economies - the pace of growth, inflation and employment, among many other things.
At the same time, it's no secret that the carnage on Wall Street last week has been a topic of discussion among ministers, central bank officials and IMF delegates at this weekend's IMF and World Bank meetings, which coincide with meetings between ministers of many of the IMF's 182 member countries.
"I think the Friday market event is one that has to be realized," said Pedro Solbes Mira, The European Unions director of economic and monetary affairs. "At the same time, we can't make a conclusion in such a brief period of time about its impact."
The 'poor' effect
The Nasdaq composite index posted an incredible 25-percent loss last week - in five trading days of 6-1/2 hours each - surpassing the October 1987 tumble that ended with a 19.5 percent loss. The Dow Jones industrial average tumbled 617.78 points, bringing its decline for the week to 7.2 percent.
 Just as rising stock markets have made Americans feel confident about their prospects and given them extra incentive to spend, a falling stock market can quickly do the exact opposite, dampening consumer sentiment and curbing spending which can lead to less than robust economic growth.
But that's not all. Thousands of dot.com companies that currently employ a large part of the U.S. workforce could quickly find it difficult to maintain their operations as their stock values - a currency used for transactions and for compensation to workers, in many cases - remain significantly below levels of a few weeks ago.
With venture capital all but dry on Wall Street, that could make it very difficult for those companies to raise the cash they need to continue operating - unless financial markets see their companies as ones with potential and their stock values begin to rise.
Some ministerial concern
While it's too soon to tell, ministers here in Washington expressed some concern about the impact the U.S. stock market will have if it doesn't recover. While there's hope that Monday's opening bell will bring out the bargain hunters on Wall Street, Friday's plunge was steep and swift, and showed no signs of letting up at the end of the day.
 Officials were anxious about the open of their own exchanges Monday in the wake of Wall Street's turbulence, particularly Latin American delegates, whose stock markets are particularly sensitive to U.S. investor sentiment. Early indications suggest that major exchanges in Asia and Europe will open sharply lower as Monday begins in those regions.
Still, none of the G-10 ministers expressed significant concern that the market downturn would pose a serious long-term threat to their economies. Japan's IMF Executive Director Yukio Yoshimura said Sunday that he is not overly concerned about the stock market, but is watching it closely.
"They are really thinking...it's not a serious problem," he said after attending meetings with his G-10 colleagues. 
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