OUCH Hope You Cashed Out at The Top Today- I did

Stressed about stress tests?

RTGAM

North American stock market indexes ran out of energy on Thursday, turning early gains into nasty losses by the close of trading. Are these mere jitters as major indexes move higher from their multi-lows in early March? Or does this mark an important turn that, as some observers predict, will take major indexes back to their lows? Stay tuned.


The Dow Jones industrial average closed at 8409.85, down 102.43 points, or 1.2 per cent - a drop of 167 points from its high early in the day. The broader S&P 500 closed at 907.39, down 12.14 points, or 1.3 per cent, though it remained slightly up for the year.


You can blame the setbacks on the U.S. government's release of stress tests later in the day (5 pm ET), with investors perhaps taking money off the table as the big moment approaches. However, most of the information has already been leaked.


Another potential culprit is Cisco Systems Inc., which reported a sharp drop in its quarterly sales and forecast that the current quarter could be even worse - a sign that the economy may not have bottomed out just yet. The shares fell 3.4 per cent.


Either way, early ebullience over a better-than-expected report on initial jobless claims for last week evaporated. Although Bank of America Corp. rose 6.5 per cent, the gain was well off the earlier high. Other financials weren't as fortunate: Wells Fargo & Co. fell 7.8 per cent and JPMorgan Chase & Co. fell 5.3 per cent.


Hewlett-Packard Co. followed the general retreat from technology stocks, which have enjoyed outsized gains during the recent rally. The shares fell 5 per cent.


In Canada, the S&P/TSX composite index closed at 9971.39, down 172.04 points, or 1.7 per cent - a substantial 370 points off its high early in the day, which put the benchmark index back below the 10,000 threshold, one day after crossing it amid widespread media fanfare.


Gold producers made out fine, with Goldcorp Inc.'s 2.5 per cent rise in line with the increase in the price of gold. However, early gains by energy stocks disappeared when the $2 (U.S.) bump in the price of crude oil - taking it closer to $60 a barrel - fell back to a gain of just 37 cents.


Research In Motion Ltd. fell 4.2 per cent and financials were also weak. Toronto-Dominion Bank fell 4 per cent and Bank of Nova Scotia fell 3.5 per cent.

Copyright 2001 The Globe and Mail