Feeds

MS ruling knocks stuffing out of Wall Street

Already they're calling it: 'Charcoal Tuesday'

  • alert
  • submit to reddit

Providing a secure and efficient Helpdesk

The Microsoft antitrust ruling initiated a badly-needed correction in the tech-heavy NASDAQ composite on Monday. By the end of trading, the composite closed down 349, or 7.5 percent, for its single-largest point loss in history as investors sold billions of dollars worth of New Economy stocks, primarily in order to buy familiar Old Economy stocks in the Dow, which rose over 300 to close at 11,222. Microsoft shares fell 15 percent Monday on jittery anticipation of the antitrust ruling, and in the process costing Chairman Bill Gates US $11 billion personally. About forty other dot-coms, caught helplessly in the vortex, sank to their lowest values for the year. The NASDAQ collapsed again Tuesday, and by over 570 points, or twenty-seven percent off from its historical high point in afternoon trading. Action on the Dow had been more restrained Tuesday, with a gain of 1.86 to 11,223.79 showing at midday. But panic on the NASDAQ spread throughout the Street, leaving the Dow down by over 500 at one point. Then programmed trading and bargain hunters colluded to save the day, which ultimately left both indices to close only slightly off from Tuesday's market opening. Ominously, Treasury notes were on the rise Tuesday as investors took refuge from dot-com uncertainty. By midday, 10-year notes were up 9/32; thirty-year bonds were up 16/32; two-year notes were up 3/32; and five-year notes were up 8/32, all a sure sign of bearish retreats to traditional comfort zones. We warned readers that a correction was iminent on the NASDAQ some weeks ago, when we perceived the imbalance between the Old and New Economy shares as artificial and impossible to sustain. The shadow of a correction appeared briefly Tuesday afternoon but could not materialise. It appears that the tech sector won't take its medicine voluntarily, so we expect to see a tremendous reciprocal momentum in both market sectors during the weeks to come. A firm correction does, of course, have to come at some point. How dramatic it will be depends on how wide the swings become. If they remain in the range of 500 points, then it will be a spectacular shock indeed. ®

Providing a secure and efficient Helpdesk

More from The Register

next story
Phones 4u slips into administration after EE cuts ties with Brit mobe retailer
More than 5,500 jobs could be axed if rescue mission fails
Driving with an Apple Watch could land you with a £100 FINE
Bad news for tech-addicted fanbois behind the wheel
Phones 4u website DIES as wounded mobe retailer struggles to stay above water
Founder blames 'ruthless network partners' for implosion
Radio hams can encrypt, in emergencies, says Ofcom
Consultation promises new spectrum and hints at relaxed licence conditions
Special pleading against mass surveillance won't help anyone
Protecting journalists alone won't protect their sources
Big Content Australia just blew a big hole in its credibility
AHEDA's research on average content prices did not expose methodology, so appears less than rigourous
Vodafone to buy 140 Phones 4u stores from stricken retailer
887 jobs 'preserved' in the process, says administrator PwC
prev story

Whitepapers

Secure remote control for conventional and virtual desktops
Balancing user privacy and privileged access, in accordance with compliance frameworks and legislation. Evaluating any potential remote control choice.
Intelligent flash storage arrays
Tegile Intelligent Storage Arrays with IntelliFlash helps IT boost storage utilization and effciency while delivering unmatched storage savings and performance.
WIN a very cool portable ZX Spectrum
Win a one-off portable Spectrum built by legendary hardware hacker Ben Heck
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Beginner's guide to SSL certificates
De-mystify the technology involved and give you the information you need to make the best decision when considering your online security options.