Stock Market Stumbles in One of the Busiest Trading Days Ever

The stock and bond markets experienced a sharp downturn yesterday, raising concerns of a correction, or a sharp retreat in stock and bond prices. The Dow Jones industrial average made up more than half its losses in the last 90 minutes of trading, leaving investors wondering which way the market would jump this morning. The decline was attributed to the cautious notes sounded by executives from Microsoft and Intel, as well as the remarks made by Alan Greenspan, chairman of the Federal Reserve, about the nation's economy. The market's fall accelerated after Greenspan's testimony, with bond prices plummeting and the 30-year Treasury bond dropping 19/32 to 10921/32.

Key Takeaways:

• The Dow Jones industrial average made up more than half its losses in the last 90 minutes of trading, but still closed down 57.41 points at 4,628.87.
• The Nasdaq composite index dropped more than 51 points before settling at 949.76, down 38.77 points, or 3.92 percent.
• The Standard & Poor's 500-stock index dropped 7.48 points, to 550.98, for a 1.34 percent decline.
• More than 483.4 million shares changed hands on the New York Stock Exchange, straining the capacity of the exchange's computer network.
• Intel was the most active stock on any exchange, with 55.9 million shares changing hands.
• The top 10 declining issues on the Nasdaq were all technology stocks, led by Intel, which dropped 8 points to 65 1/4.
• Analysts predict a correction in the stock market, with some expecting a 300-point decline over the next few weeks.
• Large holders of stocks, including William H. Gates, Microsoft's chairman and largest individual stockholder, saw his shares fall in value due to the market's downturn.

Statistics:

• The Dow Jones industrial average closed down 57.41 points at 4,628.87.
• The Nasdaq composite index dropped 38.77 points to 949.76, for a 3.92 percent decline.
• The Standard & Poor's 500-stock index dropped 7.48 points to 550.98, for a 1.34 percent decline.
• More than 483.4 million shares were traded on the New York Stock Exchange, with Intel being the most active stock, with 55.9 million shares changing hands.
• The 30-year Treasury bond dropped 19/32 to 10921/32.

Sources:

• "The New York Times," July 19, 1995
• Bloomberg Financial Markets
• Datastream
• Chase Securities Inc.
• The Chicago Corporation
• Kemper Securities Inc.
• Cowen & Company
• Oppenheimer & Company