THE VIRGINIAN-PILOT
Copyright (c) 1994, Landmark Communications, Inc.
DATE: Wednesday, November 23, 1994 TAG: 9411230455
SECTION: BUSINESS PAGE: D01 EDITION: FINAL
SOURCE: STAFF AND WIRE REPORT
LENGTH: Medium: 61 lines
Renewed fears over rising interest rates on Tuesday triggered the largest sell-off of stocks since Feb. 4, the first of six times the Federal Reserve raised rates this year.
The Dow Jones Industrial Average plunged 91 points to close at 3,677. On Monday the Dow tumbled 46 points.
Stocks were dumped by huge institutional investors opting to put their money in bonds, which are considered a safer bet than stocks. U.S. Treasury bonds have been yielding 8 percent or higher for more than a month as a result of increased interest rates.
Last week, after the Federal Reserve Board pushed up interest rates again, investors became convinced that yields were not about to fall anytime soon. That, analysts say, fueled this week's stock sell-off.
Market analysts, for the most part, see Tuesday's plunge more as bargain hunting by large investors than as signs of an impending stock market crash, analysts say.
``It's a short week. There aren't any buyers around. Futures are down, and there's just no place to go,'' said George Pirrone, senior trader at Dreyfus Corp. ``It reminds me of a day of a snowstorm a couple of years ago, when people went home at 1 o'clock, and the market ended down 110.
``Nothing (fundamentally) has really changed today,'' Pirrone said. ``It's the same scenario: worries about interest rates, a flight to bonds and cash, and no one around to buy stocks.''
Tuesday is considered the last trading day of the week, which is being cut short by the Thanksgiving holiday. Although there's still one more day before the holiday, traders said that market participation will be nearly cut in half today, with even fewer players expected Friday.
If selling persists today, the market's historic trend of rallying before and after a holiday would be broken. For Thanksgiving, the rally occurs more than 80 percent of the time, traders said.
``No one's panicking,'' said John Piscitelli, an assistant vice president in Scott & Stringfellow Inc.'s Norfolk office. ``While some look at this as a crisis, others see it as a buying opportunity. . . . Actually, the only orders I took today were buy orders.''
Other stock market experts in Hampton Roads also seemed to be taking Tuesday's stock dive in stride and looking for opportunities to capitalize on depressed stock prices.
``Any time the market drops 91 or 92 points, it causes some concern,'' said Richard M. Coradi, vice president and portfolio manager in the Norfolk office of Wheat, First, Butcher & Singer Inc. ``But I think for the most part people are taking a level-headed approach.
``The big questions I'm getting are, `When do we buy? What do we buy? and How much do we buy?', '' Coradi said. The problem with answering those questions, he said, is ``the stock market gets very emotion-driven and you don't know where the emotion stops.''
KEYWORDS: STOCK MARKET
by CNB