Markets react to Clinton video

Stocks fall hard after President Clinton's grand jury videotape is released but make a strong comeback as the initial shock is absorbed.

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Wall Street stocks fell hard at the opening bell, as investors gauged what damage the release of President Clinton's videotaped grand jury testimony would inflict on already jittery markets, but recovered later after investors absorbed the initial shock.

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"I think the fear was that you were going to have a very angry President Clinton and a lot of emotion that would be negative toward his stability," said Tony Dwyer, chief market strategist at Ladenberg Thalmann. "The truth was that he was relatively stable."

The release of Clinton's videotaped grand jury testimony regarding his inappropriate relationship with Monica Lewinsky initially roiled Wall Street. The Dow Jones Industrial Average fell as much as 184.31 points before making a strong comeback. The blue chip index closed the day up 37.59 points, or nearly half a percent, at 7,933.25.

The Nasdaq closed up 16.66--a full percentage point--at 1,680.43, after being down as much as 48.44 points earlier on.

Analysts were in general agreement that the White House sex scandal would not further upset U.S. markets, which already are in turmoil as a result of shaky markets in Asia and Russia.

"The fact is, the markets have already discounted a good portion of this Clinton problem," said Peter Cardillo, director of research at Westfalia Investments.

Overseas markets plunged once again today. In Japan, the apparent collapse of a compromise bill aimed at stabilizing the ailing country's increasingly troubled banks sent the Nikkei Index down 385.82 points, or 2.72 percent, to 13,597.3. Hong Kong's Hang Seng also took a pounding, falling 3.7 percent, or 275.73 points, to 7,170.23.

Reuters contributed to this report.