It was an ugly day on Wall Street today, but words from an influential international financier helped spark a late afternoon rally to help U.S. markets regain some heavy losses early on.
The Dow Jones Industrial Average fell as much as 233 points today before struggling to close down only 63.34 points or .81 percent at 7,721.35. The technology-heavy Nasdaq Composite Index, which fell more than 103 points earlier, closed down 78.29 points or 4.85 percent at 1,536.69.
Financier George Soros said he expects the Federal Reserve to further cut key U.S. interest rates--much more aggressively than the recently announced quarter-percent cut. He said also that President Bill Clinton's call for new International Monetary Fund loans was on the right track. He added, however, that these measure were not enough to stem the worldwide economic slide.
Indeed stocks plunged earlier today after the world's economic powerhouses failed over the weekend to secure a plan that would address shaky global economies.
"I think the interest rates will have to come down," Soros said.
The blue chip index had gained 152 points on Friday to buck a 2-day slide.
Technology stocks were especially hit hard today with capital flight from stocks to less volatile investments such as bonds and treasuries.
Shares of networking giant Cisco tumbled 13.34 percent to 48.31 on news that the Federal Trade Commission is investigating the company's business practices (See related story). The report says that the government is looking into whether Cisco proposed dividing up the emerging networking market with its rivals, mainly Lucent Technologies and Northern Telecom. Cisco shares have traded as high as 70.13 and as low as 30.25 during the past 52 weeks.
Stock in Avid Technology plunged as much as 42 percent after the company warned of lower-than-expected revenues. After the markets closed Friday, the video- and audio-editing software maker said its revenues would be in the range of between $112 million and $114 million, compared with revenues of $116.5 million reported for the like quarter a year ago. The stock lost 40.49 percent of its value to close at 13.69. Shares of Avid have traded as high as 47.75 and as low as 18.62 during the past 52 weeks.
Political turmoil also has unsettled U.S. markets, as Congress prepares to open an impeachment hearing against President Bill Clinton.
Today's declines came on the heels of a fruitless meeting of the Group of Seven nations over the weekend. Central bankers and finance ministers from the world's most powerful economies failed to come up with a strategy to quell the expanding worldwide economic crisis.
In addition, top Japanese bankers confirmed at the meeting that Japan's banking system is in a shambles, with 19 of its largest banks in far more dismal condition than previously acknowledged, The New York Times reported today.
Overseas, Japan benchmark Nikkei Index fell 2.08 percent or 275.57 points to close below 13,000 at 12,948.12. Hong Kong's Hang Seng fell even harder, dropping 4.05 percent or 318.92 points, to 7,564.54.