NEW YORK- Stocks plummeted in heavy trading Friday - with the Dow industrials down a record 616 points and the Nasdaq composite index also taking a record fall of 356 points - as inflation jitters extended Wall Street's selling spree.
The Dow Jones industrial average, which fell 201 points on Thursday, at one point tumbled an additional 722 points before coming back somewhat in the final minutes. Wall Street's best-known indicator closed down 616.23, or 5.6 percent, at 10,307.32, according to preliminary figures. That surpassed the previous record one-day drop of 554.26 points of Oct. 27, 1997, but was far from a record decline in percentage terms.
The slide Friday left the blue-chip index down 12 percent from its Jan. 14 record of 11,722.98.
The Nasdaq composite index tumbled 356.74, or by 9.7 percent, to 3,320.04 at the close, according to early calculations, dropping deeper into bear-market territory. That surpassed the previous record, a 349.15-point slide of April 3 and was the second-biggest daily percentage decline after the 11.35 percent of Oct. 19, 1987.
The Nasdaq already had plunged 769 points, or 17 percent, in the first four days of this week. With the latest decline, the technology-focused average was off 34 percent from its March 10 record of 5,048.62.
A bear market is considered a sustained drop of more than 20 percent.
Trading volume exceeded 2 billion shares on the Nasdaq Stock Market and surpassed 1 billion shares on the New York Stock Exchange.
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.
''It was a momentum market on the way up; it is a momentum market on the way down,'' said Nick Sargen, an investment strategist for J.P. Morgan.
A government report Friday morning of an unexpectedly strong rise in consumer prices in March added to Wall Street's unease.
The figures rekindled worries that the Federal Reserve not only would raise interest rates again, but might be more aggressive in trying to cool down the economy. The Fed has raised rates five times since June, each time by a quarter-point in borrowing charges. Now, some investors fear a half-point increase.
Markets overseas also were broadly lower: Japan's Nikkei stock average fell about 0.5 percent before trading began on Wall Street. In Europe, where trading ended as Wall Street shares were tumbling, key indexes fell 2.8 percent in Britain, 3.2 percent in France and 3.1 percent in Germany.
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On the Net:
New York Stock Exchange: http://www.nyse.com
Nasdaq Stock Market: http://www.nasdaq.com
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