By Stewart Lewis
(May 19 – 17:30 ET) – Worried about continued interest rate hikes, investors shied away from stocks that could suffer in a cooling economy. A U.S. report on the trade deficit, released this morning, showed that consumers continue to spend heavily on foreign imports despite recent attempts by the U.S. Federal Reserve to put the brakes on economic expansion.
Technology shares led a broad decline on Friday. The Dow Jones industrial average was down 157 points to 10620. The NASDAQ composite index fell 4%. It dropped for a third consecutive session, 111.90 to 3426.80 following a 106.25 point drop on Thursday.
The decline was broad. Internet, semiconductor, computer and telecommunications stocks suffered heavy losses. Financial stocks, vulnerable to changes in interest rates, also slipped.
The Canadian markets also dropped today. The TSE 300 composite index fell 257.36 to 9292.59. Declining issues outnumbered advancing issues 601 to 501, with 273 issues unchanged. Tech stocks led the drop. BCE slipped $1.45 to $33.75. Nortel Networks fell $5.75 to $78.85. Merrill Lynch fell another $4 this afternoon for a $12 drop on the day, down to $156.
The tech-laden CDNX also fell today, dropping 26.95 to 3410.31 Declining issues on the venture exchange also exceeded advancing issues. The final tally was 318 to 253.