Newspaper article THE JOURNAL RECORD

Stocks Suffer Third Straight Drop as Falling Dollar Rattles Investors

Newspaper article THE JOURNAL RECORD

Stocks Suffer Third Straight Drop as Falling Dollar Rattles Investors

Article excerpt

NEW YORK (AP) _ Stocks suffered a third straight losing session Tuesday as another setback for the dollar unnerved investors.

The Dow Jones industrial average and broader market indicators finished substantially lower but above their worst readings of the day. The blue chip indicator ended off 33.93 at 3,707.97 after rebounding from more than a 50-point deficit.

"It was a miserable day," said Edward Nicoski, chief market strategist for the investment firm Piper Jaffray Inc. in Minneapolis. "The internals of the market were absolutely horrible," he said citing the large margin of more than 3 to 1 by which losing New York Stock Exchange issues outnumbered gainers.

Market measures that comprise a wide range of stocks also dropped sharply. The NYSE composite index fell 2.30 to 249.10 and Standard Poor's 500 stock index fell 4.14 to 451.34.

Selling grew intense shortly after midday as the dollar sank against the Japanese yen to a depth not seen in the post World War II era. The deluge of sell orders tripped "circuit breakers" on the NYSE that restrict certain types of computer-guided trading.

These restrictions, adopted after the 1987 market meltdown, are aimed at keeping transactions as orderly as possible and maintaining investor confidence. After the curbs on program trading were triggered, the heavy selling moderated. Volume grew to 293.69 million shares on the Big Board's floor from 229.14 million as of 4 p.m. EDT Monday.

Weakness in technology stocks added to the gloomy atmosphere on Wall Street where investors were preoccupied with speculation about whether the Federal Reserve will try to counteract the dollar's decline.

A dramatic worsening in the country's trade deficit added to the anxiety about the dollar. The Commerce Department said the shortfall in the balance of trade in goods and services soared to $8.40 billion in April from $6.87 billion in March.

Worries that the dollar's descent against its major foreign counterparts could induce the Fed to raise interest rates for the fifth time this year had upset the financial markets Monday.

Dollar jitters, combined with slumping foreign stock prices and computer-guided program selling, sent the Dow industrials down 34. …

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