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Bad Inflation Report Sends Dow, Nasdaq PlummetingAired April 14, 2000 - 2:06 p.m. ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
LOU WATERS, CNN ANCHOR: Investors are feeling more pain today. The April tech correction, if that's what it is, continues. It was set off today by a bad inflation report. Millions are simply evaporating from portfolios. The Dow is down sharply but the Nasdaq is taking the worst dive, down 300 at one point today.
It's been a dreadful week for the index. Since Monday, the Nasdaq has dropped about 1,000 points, 20 percent of its value. It helps to keep some perspective on a day like this. The Nasdaq is back where it was just last Thanksgiving, so you're really no poorer than you were before the holidays, right?
CNN's Myron Kandel is in New York watching the falling numbers.
Mike, what are we to make of all of this?
MYRON KANDEL, CNN FINANCIAL EDITOR: Well, I don't know if I'd call it right, Lou, because investors in Nasdaq are down 33 percent from where they were just about a month ago. The real significance right now at this moment is that the Dow is at its low for the day. It's down 444 points. It was down 400 points in early trading, gained back more than 100 of those points, but, as we see on the board, is falling again. That's the board at the New York Stock Exchange, and the Dow industrials down 446 points.
The Nasdaq composite down 253 points. The Nasdaq taking a brutal beating this week. The first four days of this week and so far today, the Nasdaq is down more than 1,000 points, and that's 20 percent loss in just this week alone, Lou.
WATERS: Is it all because of inflation fears today, or is this part of the trend that started a while back? And I heard you yesterday talking -- it was about to bottom out. Are we still waiting to get to the bottom?
KANDEL: Boy, if anybody said it was going to bottom out like I did, he was wrong. It certainly hasn't bottomed out yet. As I said, the selling has accelerated.
What happened today is we got a bad inflation report. Inflation has been so much under control lately that we sort of took it for granted. But today we got the Consumer Price Index showing a rise in consumer prices of 7/10 of 1 percent, much more than economists had expected. So that added to the nervousness. It's now virtually certain that the Fed will raise interest rates again when it meets next month. Some people were a little bit doubtful because the market had fallen so much that maybe the Fed would take a respite. But with this higher inflation, it looks like the Fed will move, and that, obviously, has a deleterious effect on the market.
This has been -- the only bright spot, perhaps, if you could even call it that, is that some people are saying this could be the classic sell-off, a selling wave and very heavy volume that sometimes marks the end of a downturn. The optimists are looking at that. The pessimists, by the way, are saying this might just open the panic gates. We haven't seen any panic selling yet, but the worry is that there could be some panic selling based on the heavy loss this week, Lou.
WATERS: Myron Kandel in Washington, as we closely follow the markets today.
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