Dow Falls 201.58; Nasdaq Off 92.85

By EILEEN GLANTON, AP Business Writer

NEW YORK (AP) - Stocks fell broadly Thursday after a spike in wholesale inflation and some mixed reports on corporate earnings rekindled the nervousness that has pervaded Wall Street all week. Technology stocks, under mounting stress over their high valuations, gave up a fragile advance and tumbled for a fourth straight session.

The Nasdaq composite index fell 92.85 to close at 3,676.78, bringing its loss for the week to 769 points. The index rose as much as 145 points earlier in the session before collapsing in the final hour of trading.

The Dow plummeted 201.58 to close at 10,923.55, its steepest point drop since March 7.

Broader stock indicators were also lower. The Standard & Poor's 500 fell 26.66 to 1,440.51 and the Russell 2000 index of smaller companies fell 4.22 to 489.22.

Inflation fears that had been almost dormant the past few weeks resurfaced Thursday after the latest government report on inflation revived concerns that the Federal Reserve would continue to push interest rates higher. The Labor Department's Producer Price Index showed wholesale prices shot up 1 percent in March, led by the biggest jump in energy costs in nearly 10 years.

The advance was a worse showing on inflation than the 0.5 percent rise many analysts expected, raising concerns that the Consumer Price Index, due out Friday, will also bode poorly for inflation and interest rates.

Bank and financial stocks, among the most sensitive to rate changes, fell Thursday. J.P. Morgan, which rose Wednesday after reporting strong profit growth, fell 5 3/16 to 131 1/2. American Express fell 4 3/4 to 146.

Separately, Federal Reserve Chairman Alan Greenspan defended the Fed's moves to raise interest rates and said the stock market's wild swings in recent days showed it is "groping for the correct balance."

The inflation concerns undermined an already shaky technology sector.

The continuing drop in the Nasdaq left the index 27 percent below its March 10 closing record of 5,048.62. Wall Street professionals consider a 20 percent drop from a peak the traditional touchstone of a bear market.

"Technology stocks are clearly in a bear market." said Eugene G. Mintz, financial markets analyst at Brown Brothers Harriman & Co. "The Nasdaq tried to rally two or three times and just couldn't hold it."

Analysts say the most fundamental reason for the drop in high-tech stocks is a growing sense that investors pushed those issues too far last year, when the Nasdaq rose an unprecedented 86 percent. The frenzy for technology stocks gave many young, unproven companies market values they did not yet deserve, analysts say.

The Nasdaq's inability to sustain its short-lived rallies indicates that the nervousness that sent the index on a long spiral downward is still in place, analysts said.

Rambus, a maker of technology used in the computer chip industry, provided the latest cautionary tale. Wednesday, the company reported a quarterly loss of $6.98 per share, citing acquisition costs and one-time expenses.

Several Wall Street brokerages raised their ratings on Rambus stock. But investors apparently felt the steep losses were reason enough to dump the stock, traders said. Rambus fell 11 3/16 to 202 5/8.

"Any bottom-fishing that occurs will be among stable companies that make money," said Michael Strauss, managing director of Commonfund Asset Management. "The heyday for stocks that have a good story but no earnings is over."

Edward Kerschner, chief investment strategist at PaineWebber, predicted bigger declines ahead for technology companies that he dubbed "new new industrials" - large-capitalization technology stocks that have only recently gone public.

Many companies in that category could see their share prices sliced by another 33 percent before their prices are in line with their earnings potential, Kerschner said.

The late-day selloff overshadowed some genuinely good news on corporate earnings. Advanced Micro Devices, a leading computer chip maker, said late Wednesday it earned $1.15 a share in the first quarter, nearly twice analysts' forecasts of 58 cents.

In another sign of investors' distress, Advanced Micro shares gave up a powerful early gain and finished down 4 1/2 to 71 1/2.

General Electric fell 6 1/4 to 150 1/2 even after reporting its earnings rose 20 percent in the first quarter, led by strong performances at its industrial systems and NBC units. Profits beat analysts' estimates by a penny. But GE's earnings missed the "whisper number" - the unofficial forecast circulated among Wall Street insiders.

Declining issues outnumbered advancers by an 11-to-8 margin on the New York Stock Exchange. On the Nasdaq, two stocks rose for every one that fell.

NYSE volume totaled 1.23 billion shares, compared with 1.42 billion in the previous session.

Overseas, Japan's Nikkei stock average fell 1.5 percent. Germany's DAX index rose 0.1 percent, Britain's FT-SE 100 rose 0.1 percent, and France's CAC-40 gained 0.4 percent.

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-- Carl Jenkins (Somewherepress@aol.com), April 13, 2000

Answers

Don't know as there was an "Initial Question" ; but the FINAL question must be : How far will the BOTH exchanges fall Friday ? Should be a 'blood bath' for all the idiots who thought they could outsmart the Big Boys with their finger on the electronic sell button , while they check the radio/TV news flashes every hour , while soiling their linnen , as my ancestors would say ! Been there .. done that in the 60's and 80's . Not any more. Twice burned; thrice shy ! Eagle ... making lazy circles in the sky ; watching the frenzied crowds .

-- Hal Walker (e999eagle@freewwweb.com), April 13, 2000.