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Markets & Stocks
Nasdaq nears 2-year low
January 2, 2001: 5:17 p.m. ET

As 2001 begins, Wall Street looks back, returning to its losing ways
By Staff Writer Jake Ulick
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NEW YORK (CNNfn) - A new year on Wall Street brought an old problem Tuesday as profit worries caused already-battered technology stocks to plunge further, sending the Nasdaq composite index to a 22-month low.

Fears about slowing corporate earnings growth again unnerved the market in a broad sell-off that sent investors fleeing stocks for the relative safety of Treasury securities.

December tax-related stock selling had already depressed share prices. But that sell-off, which often makes January a good month for stocks, failed to lure bargain hunters Tuesday. Cisco Systems and Sun Microsystems both fell to some of their lowest levels in a year.

graphic"Perhaps the market hasn't figured out it's January," Maureen McCarthy, head of equity trading at Robertson Stephens, told CNNfn's market coverage. "The market has a bit of a 2000 hangover."

Fueling that hangover, the nation's manufacturing sector showed surprising weakness last month, a trade group reported, in the latest sign that a record economic expansion has lost steam.

The Nasdaq lost 178.66 points, or 7.2 percent, to 2,291.86. The losses, the Nasdaq's seventh worst on record, marked its lowest finish since March 3, 1999, when the index closed at 2,265.20.

The Dow Jones industrial average dropped 140.70 points, or 1.30 percent, to 10,646.14, dragged lower by General Electric and financial stocks. The S&P 500 shed 37.01, or 2.8 percent, to 1,283.27.

graphicMore stocks fell than rose. Declining issues on the New York Stock Exchange beat advancing ones 1,721 to 1,346, on trading volume of 1.1 billion shares. Nasdaq losers topped winners 2,335 to 1,646. More than 1.9 billion shares changed hands.

The yield on the government's 10-year note, which moves in the opposite direction of its price, fell to its lowest level in nearly two years. The dollar fell versus the euro and was little changed against the yen.

What market bounce?

In the latest sign that the economy's best days may be behind it, the National Association of Purchasing Management said its index of manufacturing activity fell sharply in December to 43.7 percent. That's well below the 47.1 percent figure expected by economists surveyed by Briefing.com and the 47.7 percent reported in November.

graphicThe number could give the Federal Reserve one more reason to cut interest rates later this month. Lower borrowing costs, in turn, could boost corporate profits, which are expected to slow sharply this year.

But the next Fed meeting is nearly one month away and the central bank rarely moves between meetings.

"I don't want to fight the Fed, " Ralph Acampora, chief technical strategist at Prudential Securities, told CNN's Street Sweep. "But where are they?"

On the Nasdaq, Cisco Systems (CSCO: Research, Estimates) shed $4.94 to $33.31 and Sun Microsystems (SUNW: Research, Estimates) lost $2.44 to $25.44.

On the Dow, financial stocks, whose profits are closely tied to any swings in the economy, fell.

American Express (AXP: Research, Estimates) lost $2.94 to $52 and  J.P. Morgan & Chase (JPM: Research, Estimates) slid $1.44 to $44. Trading under the ticker symbol, "JPM," the newly merged J.P. Morgan & Chase replaces J.P. Morgan on the Dow industrials.

General Electric (GE: Research, Estimates) lost $4.19 to $43.75.

The days losses come as companies such as SBC Communications (SBC: Research, Estimates), Xerox (XRX: Research, Estimates) and Federal Express  (FDX: Research, Estimates) have spent the past few weeks warning that upcoming earnings will disappoint Wall Street.

Many expect more warnings ahead.

"I don't think we've heard all the bad news," Marshal Acuff, equity strategist at Salomon Smith Barney, told CNNfn's market coverage.

graphicBut the day also saw some gains. Among them, IBP (IBP: Research, Estimates) rose $1.25 to $28 after Tyson Foods said it would buy the beef processor for $3.2 billion, or $30.00 a share in cash and stock.

Tyson (TSN: Research, Estimates), the poultry processor, lost 94 cents to $11.81.

On the Dow, many of last year's winners continued drawing buyers. Exxon-Mobil (XOM: Research, Estimates) gained $2.19 to $89.13 while Philip Morris (MO: Research, Estimates) rose $2.19 to $46.19.

After surging in 1999, all three major stock indexes fell in 2000 for the first time in a decade, led by declines in technology stocks. The Nasdaq, home to many of the largest tech companies, dropped 39 percent last year, its worst year on record.


Click here for a look at CNNfn's year-end special report.


Still, Maureen McCarthy, head of equity trading at Robertson Stephens, told CNNfn's market coverage that once the Nasdaq shakes off this weak start, there's a good chance for a bounce-back rally in the next few sessions. (370K WAV) (370K AIFF). graphic

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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.