Roundup: Markets on 1st October
All fall down again...
Fear of recession gripped Wall Street yesterday, causing the Dow to drop 210 points (2.7 per cent) and Nasdaq 82 points (4.8 per cent, which would be the equivalent of 377 Dow industrials points, showing that the high-tech market suffered more than NYSE). As a result, money is flowing from equities to bonds, but the 30-year Treasury bond dropped again to yield only 4.87 per cent interest, the lowest since 1967. Using the Wilshire 5000 index, US investors lost $324 billion yesterday. The power of financial analysts to influence the share price was evident yesterday when Richard Park of Merrill Lynch downgraded Cambridge Technology Partners, Ciber and Keane, resulting in falls of 6 per cent, 20 per cent, and 6 per cent respectively. Considering that their p-e's are 15, 18 and 14 respectively for 1999 earnings, this did seem excessive. Steven Brier of BancBoston had an interesting observation. He thought that such companies offered essential services, and were less influenced by Y2K spending patterns: "You cannot not spend on a Year 2000 project right now and you can't not spend on maintenance of your existing legacy systems, and you can't stop a project that is halfway completed." There were some big losers. The Irish CBT Group that specialises in training was hammered 29 per cent after its CEO and CFO resigned because of anticipated poor Q3 results to be released later this month. Microsoft was down 6 per cent, Cisco down 7 per cent, Dell down 6 per cent, Compaq and Gateway down 5 per cent. The Internet sub-sector had one of its heavier swings with AOL down 10 per cent, Excite down 13 per cent, Yahoo down 13 per cent, and Amazon.com down 8 per cent. Click for more stories
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