Stocks plunged Wednesday after more inflation warnings from Federal Reserve officials unnerved investors.
Three more Federal Reserve Bank presidents echoed Dallas Fed President Richard Fisher’s suggestion Tuesday that the Fed plans to continue to raise interest rates to fight inflation.
Coupled with a report showing a slowing service sector with rising prices, the result was a one-sided victory for market bears, with four out of five stocks falling on the NYSE and NASDAQ, and a stunning 90.6% of NYSE volume was to the downside. About the only positive for investors is that such extremes of selling pressure can lead to good rallies (see Technical Analysis: Selling Pressure Turns Extreme).
The Nasdaq fell 36 to 2103, the S&P tumbled 18 to 1196, and the Dow plunged 123 to 10,317. Volume rose to 2.5 billion shares on the NYSE, but declined to 1.96 billion on the Nasdaq. Decliners led advancers 27-6 on the NYSE, and 24-6 on the Nasdaq. Downside volume was 91% on the NYSE, and 84% on the Nasdaq. New highs-new lows were 73-158 on the NYSE, and 83-84 on the Nasdaq.
GoAmerica ADC Telecom Mercury Interactive Extreme Networks Ingram Micro Neoware soared 68% on a deal with AOL.
and MIPS
fell 13% each on warnings, and Motive
plunged 36% after saying it won’t meet financial targets for the rest of the year.
tumbled 14% on a warning and SEC investigation.
climbed 5% on a Bank of America “buy” rating.
climbed 3% on news that it will join the S&P MidCap 400.
edged higher after the company raised guidance, and Sykes
rose 9% after hiking guidance.
