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Stocks Down Sharply in Early Afternoon

01:48 p.m Jan 04, 2000 Eastern

By Eric Wahlgren

NEW YORK (Reuters) - Stocks fell to new session lows in early afternoon trading on Tuesday with financial stocks the biggest losers amid concern about interest rates and second thoughts about lofty technology issue valuations.

The Dow Jones industrial average (.DJI) declined 301 points, or 2.66 percent, at 11,055, pulled down by American Express Co. (AXP.N), off 6-3/4 at 150-1/2 and J.P. Morgan & Co. (JPM.N) Hewlett-Packard Co. (HWP.N), which was off 4-11/16 at 116-3/4.

The New York Stock Exchange said it imposed program trading curbs at 12:43 p.m. after the Dow fell more than 220 points. The exchange imposes curbs whenever the Dow rises or falls 220 points.

The Nasdaq composite index (.IXIC) was down 180 points, or 4.36 percent, at 3,950 after setting a record high on Monday.

The broader Standard & Poor's 500 index (.SPX) was down 44 points, or 3.06 percent, at 1,410.

``Other than interest rates, I really don't see anything,'' said Richard Cripps chief market strategist at Legg Mason Wood Walker in Baltimore. ``I think there is a full realization that the stock and bond market are linked in a way that prevents the stock market from going higher. What I sense is a willingness to button in more profits. Today more than yesterday there is more realization that the market has topped out.''

The benchmark 30-year U.S. Treasury bond's yield, which was at 6.56 early Tuesday afternoon as its price strengthened 31/32. It closed at 6.62 percent on Monday, a 27-month high.

`I think it's postponed profit-taking and a delayed reaction of what is happening on the rate front,'' said Arnold Berman, Technology Strategist, SoundView Technology Group about stocks decline. ``We saw a decoupling between the action in the Nasdaq and the bond market yesterday and today are getting catch up move. It's nothing that will be long in duration.''

Internet, financials, retailers, gold and telecommunications shares all were falling back on fears of rising interest rates.

In economic news, President Clinton is planning to renominate Alan Greenspan as the chairman of the Federal Reserve bank, a senior U.S. official said.

``If you own stock, you should view this as a blessing because we know Greenspan always comes to the defense of the stock market when it sells off. So this would be a buy signal,'' said Paul Kasriel, the chief domestic economist at Northern Trust in Chicago.

Declining shares pounded advances 21 to 8 with more than 599 million shares traded on the New York Stock Exchange. There were only 19 shares at new highs and 139 at new lows.

Companies in the news included Sears, Roebuck & Co. (S.N), up 2 at 32-3/16 after it projected its fourth quarter earnings before special items should top profits from a year ago.

Parametric Technology, (PMTC.O), was down 6-1/16 at 19-1/16 after it issued a first quarter profit warning.

URL: http://money.go.com/MarketNews.html?col=NX&arn=a2626robtz-19990729&dbid=4&CAT=BUSINESS&ak=news420&kt=A

-- snooze button (alarmclock_2000@yahoo.com), January 04, 2000