Newspaper article THE JOURNAL RECORD

Stock Market Plunges

Newspaper article THE JOURNAL RECORD

Stock Market Plunges

Article excerpt

NEW YORK -- The Dow Jones industrial average plunged 300 points on Tuesday, suffering its third-biggest point drop ever and raising fears the stock market's tumble is far from over.

The Dow fell 299.43 points -- the biggest one-day point-drop since the Oct. 27 slide of 554 points -- to finish at 8,487.31 in the second busiest day in history.

In just 12 sessions since it closed at a record 9,337.97, the Dow has fallen 850 points or 9.1 percent to its lowest level since March.

The past few weeks have been dominated by a series of discouraging signals on the economy and company profits, as well as continuing troubles in Asia, dashing hopes that improving conditions in the second half of 1998 would justify the market's lofty heights.

The surprising drop has left investment pros divided over whether the market is mired in one of its frequent post-rally downturns, popularly known as a correction, or caught in the throes of something far more severe.

Several of Wall Street's most prominent optimists have expressed doubts about the bull market's staying power in recent days.

Ralph Acampora, an outspoken market analyst at Prudential Securities noted for his predictions that the Dow would hit 10,000 this year, appeared on CNBC twice on Tuesday, declaring that the bull is giving way to a bear market.

A normal "correction" is typically defined as a 10 percent drop, while "bear markets" are usually described as drops of more than 20 percent.

Other leading analysts, however, maintained an optimistic stance, noting that there's still no recession and that both interest rates and inflation remain low.

"You don't have much more than a correction in the stock market here," said Jeffrey Applegate, chief investment strategist at Lehman Brothers, standing by his year-end target of 1,250 for the Standard & Poor's 500, which plunged 40.32 to 1,072.12 on Tuesday."The overriding reason why the market's done so well this year is not because of earnings, but because interest and inflation fell."

On Tuesday, the Conference Board, a business research group, said its Index of Leading Economic Indicators slipped in June for the second straight month. …

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