U.S. Stocks Fall for Third Day Amid Asian Economic Concerns

Strategic Insights -

U.S. stocks plunged for the third consecutive day as investors became increasingly cautious about the potential impact of slowing Asian economies on profit growth in 1998. The decline was led by major banks, including Citicorp, J.P. Morgan & Co., and others. Analysts pointed to the heightened risk of losses for companies with significant exposure to the Asian market, citing J.P. Morgan as a prime example of a company that could suffer from continued economic troubles in Asia. Despite the decline, gold stocks experienced a rare gain, with the precious metal's price surging as the dollar weakened.

Key Takeaways:

  • U.S. stocks fell for the third consecutive day, driven by concerns about the impact of slowing Asian economies on profit growth in 1998.
  • Major banks, including Citicorp, J.P. Morgan & Co., and others, led the decline, with analysts pointing to the heightened risk of losses for companies with significant exposure to the Asian market.
  • J.P. Morgan was specifically mentioned as a prime example of a company that could suffer from continued economic troubles in Asia.
  • Cummins Catherwood, a managing director at Rutherford, Brown & Catherwood, stated, "So many stocks are carrying a much greater degree of risk than reward right now."
  • The Dow Jones Industrial Average fell 50.07 points, or 0.7 percent, to 7680.81 in late trading, and lost 1 percent for the week.
  • The 30-stock average's decline was exacerbated by the New York Stock Exchange's imposition of its "uptick" rule, which curbs computer-guided trades.
  • The Standard & Poor's 500 Index fell 5.94 points, or 0.6 percent, to 957.10, and lost 0.7 percent for the week.

Statistics:

  • The Dow Jones Industrial Average fell 50.07, or 0.7 percent, to 7680.81 in late trading.
  • The 30-stock average lost 1 percent for the week.
  • The Standard & Poor's 500 Index fell 5.94, or 0.6 percent, to 957.10, and lost 0.7 percent for the week.
  • Citicorp slid 1 13/16 to 113.
  • J.P. Morgan dropped 3 5/16 to 99 9/16.
  • Gold stocks had their best day in five weeks.
  • The precious metal's price jumped $9 to $300.30 an ounce as the dollar weakened.

Sources:

  • The New York Times (Date not specified)
  • Dow Jones & Company (Date not specified)
  • Rutherford, Brown & Catherwood (Date not specified)