Blue chips led stocks sharply lower yesterday, knocking the Dow Jones Industrial Average down to a new two-year low, as fresh inflation data eroded hopes of aggressive interest-rate cuts in the future from the Federal Reserve.
The Dow tumbled 2.40 per cent, not far above a fresh two-year low at 9,461.54, and the lowest close for the Dow since early March 1999. The tech-laden Nasdaq Composite Index fell 1.47 per cent and Standard & Poor's 500 Index lost or 1.79 per cent.
Yesterday's freefall, which followed Tuesday's 238-point drop, was the latest in a series of market routs as investors find little reason to hold onto equities at current prices amid falling corporate-profit growth, and the tottering economy. The blue-chip Dow average is now just 112 points away from a "bear" market, defined as 20 per cent off the all-time closing high of 11,722.98 on January 14th, 2000.
Weighing on the Dow yesterday was Procter & Gamble, which fell $2.70 to $63.20, as the consumer products heavyweight considers large-scale job cuts in the flagging economy.
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