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CNN Today

Financial Markets Take Another Steep Dive, Continue Sell-Off

Aired January 4, 2000 - 2:34 p.m. ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

NATALIE ALLEN, CNN ANCHOR: Financial markets taking another steep dive today, continuing yesterday's sell-off.

CNN financial editor Myron Kandel is at our business desk in New York.

Mike, what's going on?

MYRON KANDEL, CNN FINANCIAL EDITOR: Well, Natalie, unless we get a big bounce in the next hour and a half, this will go down as one of the worst days in Wall Street history. The Dow Industrials are now plunging 312 points. That's very close to their low for the day, now 313, 312. At 11046, it's the second-straight day of triple-digit losses.

But there are a couple of silver linings. First, volume is heavy but not extraordinary. So despite some appearances to the contrary, this can be considered an orderly sell-off. And there's a cause for some of the selling that may not continue too much longer: Many investors are taking profits now in some of the high-flying stocks that had big gains last year. By waiting for the calendar to roll over into a new year, those investors can defer paying taxes on the capital gains until April of next year.

Many of those high flyers are traded on the Nasdaq, and that's where a lot of today's damage can be found. The Nasdaq composite is down 164 points, nearly 3 1/2 percent. At this level, it will be one of worst one-day sell-offs in Nasdaq history.

Back to you, Natalie.

ALLEN: And, Myron, all of this happening on the day the president renominated Alan Greenspan to another term as chairman of the Federal Reserve Board. Isn't he a hero? What's the deal, this happening on such a day.

KANDEL: Well, Natalie, there's really some irony in that. Greenspan is credited with helping steer the economy to this amazing period of sustained growth. In a couple of weeks, it'll be the longest economic recovery in U.S. history. But the Fed is widely considered about to raise interest rates again at its next policy meeting next month, and that's worried investors who think, if interest rates go up again, that will affect the stock market. Now the bond market had a big sell-off yesterday. It's come back a bit today, but interest rates on those 30-year -- the yield on those 30-year Treasury bonds are just about at a two-year high, and that's worried stock market investors -- Natalie.

ALLEN: Myron Kandel in New York. Thanks, Myron.

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