Dow Falls 300; Nasdaq Down 27
Thursday, October 12th 2000, 12:00 am
By: News On 6
NEW YORK (AP) â€” The Dow Jones industrial average plunged more than 300 points at one point during early trading Thursday as skittish investors reacted to an earnings warning from Home Depot and an apparent terrorist attack on a U.S. military ship in Yemen.
In the first hour of trading, the Dow Jones industrial average was down 236.29 to 10,178.50 after falling more than 310 points at one point.
Broader markets fell as well. After opening up 75 points, the Nasdaq composite was down at 12.52 to 3,155.97. The Standard & Poor's 500 index was off 18.40 to 1,346.19.
The markets also seemed to be reacting to events overseas. A U.S. Navy ship in port in Yemen was struck Thursday by a small boat in an apparent terrorist act that killed at least four Americans and injured more than 30, the Defense Department said.
Meanwhile, Middle East tension escalated as Israeli combat helicopters rocketed Palestinian leader Yasser Arafat's residential compound in the Gaza Strip as well as a West Bank town in retaliation for the brutal killing of two Israeli soldiers by a Palestinian mob.
Oil prices surged $2.75 to $36 a barrel on the New York Mercantile Exchange.
``In an in already nervous market this is all we didn't need,'' said Al Goldman, an analyst with A.G. Edwards & Sons Inc. in St. Louis
``A terrorist attack, increased hostilities in the Middle East and a spike in oil prices â€” shake it all up and you get blind dumping of stocks.''
Domestically, shares of Home Depot, the nation's largest home improvement retailer, plunged 26 percent after it warned that its third-quarter and full-year earnings will fall short of expectations, primarily because of price deflation in lumber and building materials.
Shares of other retailers fell following the Home Depot's earnings warning. They included Wal-Mart, down $2.44 to $42.88.
Financial services also were down sharply, led by Citigroup, down $3.19 to $46.31 and JP Morgan, off $9.06 to $137.75.
Technology stocks appeared to benefit from investor optimism in early trading, including the battered chip sector. Advanced Micro Devices rose $2.19 to $24 after its earnings beat Wall Street expectations.
But Yahoo! continued to fall on concerns about whether it deserves its high valuations. Yahoo was off $3.56 to $61.81.
The Russell 2000 index was up 1.16 at 475.90.
Overseas, Japan's Nikkei stock average rose 0.24 percent. In afternoon trading, Germany's DAX index was down 0.78 percent, Britain's FT-SE 100 climbed 0.82 percent, and France's CAC-40 was down 0.1 percent after being up 1.1 percent.
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