Dow Down 199.86; Nasdaq Down 143.95 : LUSENET : TimeBomb 2000 (Y2000) : One Thread

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Friday January 28, 1:24 pm Eastern Time

Dow Down 199.86; Nasdaq Down 143.95

NEW YORK (AP) -- Stocks stumbled Friday amid fresh signs of economic growth so strong that the Federal Reserve's inflation-fighters are likely to raise interest rates again when they meet next week.

The Dow industrials at one point were down more than 200 points and the Nasdaq composite index fell more than 150 before regaining some lost ground.

The Dow Jones industrial average was down 199.86, or by 1.8 percent, at 10,829.16 in active trading this afternoon. Broader stock indicators were also posting sizable losses, with the Nasdaq down 143.95, or by 3.6 percent, at 3,895.61.

Before the session began, the government released two reports that reinforced expectations that the Fed will intensify its battle against inflation next week by raising interest rates to slow the U.S. economy. There also are worries that more increases will follow in the months ahead.

Rising rates increase the cost of doing business, reducing corporate profits. Higher rates also could slow consumer spending, which has been a driving force behind the economy's long expansion.

The Commerce Department on Friday reported that the economy grew at a sizzling 5.8 percent annual rate during the final three months of 1999, well above the 5.1 percent forecast by many analysts and the strongest growth since a 5.9 percent rate posted in the last three months of 1998.

Separately, the Labor Department said its Employment Cost Index, closely watched by Fed Chairman Alan Greenspan, rose 1.1 percent in the fourth quarter, or faster than the 0.9 percent increase many analysts were expecting. Employment costs typically account for two-thirds of a product's price.

-- snooze button (, January 28, 2000


Oh my. So much for selling my home, with the rise in interest rates. I've had my home up since October and still hasnt sold, each time the rates go up the realtor calls to ask if anyone has came by/called to see it....He called last nite......My true sign...contract expires in March, my rate is currently 7 1/2 and we had hoped to have it sold so we could lock into good rate.

-- consumer (, January 28, 2000.

How much of that "growth" is really due to stockpiling in the 4 Quarter of 1999?? I haven't been to Costco this month, and our purchases will probably not get back to "normal" for 2 or 3 more months.

Greenspan has to be VERY careful how he plays this.

-- K. Stevens (kstevens@ It ALL went away 4 weeks, January 28, 2000.

-- uu (s@f.m), January 28, 2000.

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