New York stock market takes 97 point tumble
THE US stock market has fallen sharply, with the Dow Jones Index dropping almost 2 per cent in a heavy sell off of shares.
The news is likely to send European markets lower when they open this morning.
The Dow Jones Index was down 113 points at one stage, before closing down by just over 97 points at 5,032.
It was the second day when the index fell heavily and it has now dropped by 165 points, or 3.3 per cent, in the last two trading sessions.
Worries over the stalled federal budget talks were blamed for upsetting the market. The talks were suspended last night. While the market was closing the Senate majority leader, Mr Bob Dole, said policy differences with the White House had narrowed slightly before discussions ended. By next Wednesday a decision might be possible on whether talks should proceed or whether they should be abandoned, he said.
However the market is now getting increasingly uneasy about the talks. investors had been banking on the talks being resolved there is now concern about whether any kind of meaningful deal can be reached before the next Presidential election.
US shares fell throughout the day in heavy trading volumes, pulling European share markets lower, with the ISEQ index in Dublin closing down 18.67 points at 2280.24.
However the US market continued to decline after European markets had closed for business. The New York Stock Exchange's limit on programme trading was activated when the index lost 50 points.
In the broader market, declining issues swamped advances 16-6 on active volume of 298 million shares on the NYSE.
Among high technology stocks getting a boost from bargain hunting were International Business Machines, Microsoft and Hewlett Packard.
Wall Street was still uneasy however, about the earnings of technology companies after Motorola reported disappointing results late on Tuesday. Motorola's stock was down 4 1/8 at 49 3/8 and topped the NYSE most active list.
"I think that yesterday signalled the start of another longer correction which could last a few weeks and lead the Dow to the 5,050/4,950 area," said Mr Norm Wolff, technical analyst at A.G. Edwards & Sons.