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Financial markets

North American Stock Markets Plummet Amid Interest Rate Worries

Strategic Insights

— 1 min read

Concerns about inflation and interest rates sent the North American stock markets sharply lower yesterday, with the Dow Jones industrial average experiencing its biggest single-day drop since February. The market's focus on interest rates was underscored by the U.S. benchmark 30-year Treasury bond climbing to its highest level since late June, yielding 6.74 per cent. Meanwhile, the proposed $33-billion mega-merger between Tele-Communications and Bell Atlantic collapsed, adding to the market's woes.

Key Takeaways:

  • The Dow Jones industrial average dropped 51.78 points to 3,839.90, its lowest finish since January 7.
  • The Toronto Stock Exchange's 300-stock composite fell 39.23 points to 4,329.12, with declining issues outpacing winners 525 to 272.
  • The Nasdaq Stock Market composite lost 9.67 points to 779.44, heavily influenced by the collapse of the Tele-Communications and Bell Atlantic merger.
  • Shares of Stac Electronics surged following the company's $120-million infringement case victory against Microsoft Corp.
  • Analysts predict Toronto may experience a minor downturn before rebounding, with some sectors already in a bear market, such as consumer stocks and utility issues.
  • BCE and Magna International were among the losers, while analysts remain bullish on BCE due to its discounted valuation and focus on telecommunications.

Statistics:

  • Dow Jones industrial average: 3,839.90 (down 51.78 points)
  • Toronto Stock Exchange's 300-stock composite: 4,329.12 (down 39.23 points)
  • Nasdaq Stock Market composite: 779.44 (down 9.67 points)
  • Tele-Communications shares: $22.37 (down $1.87)
  • Bell Atlantic shares: $54.50 (up $1.75)
  • Stac Electronics shares: $6.16 (up $2.04)
  • Microsoft Corp. shares: $79.87 (down $1.12)
  • Turner Trading volume: 68.2 million shares valued at $909.6-million (down from 82.5 million shares valued at $798.2-million)

Sources:

  • The Globe and Mail
  • The Dow Jones industrial average
  • The Toronto Stock Exchange's 300-stock composite index
  • The Nasdaq Stock Market composite index
  • The U.S. Commerce Department (durable goods orders)
  • Tele-Communications and Bell Atlantic (mega-merger collapse)
  • Stac Electronics (infringement case victory)
  • Microsoft Corp. (data compression technology dispute)
  • BCE (telecommunications assets and valuation)
  • Magna International (record second-quarter profit)

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