U.S.

Wobbly Nasdaq Getting Bearish

By CBSNews.com staff CBSNews.com staff

October 21, 2000 / 11:11 PM EDT / CBS

End the year now, and it would be the worst in a quarter century for the Nasdaq. The Nasdaq is on track for its worst year since 1974, when the Index plunged 35 percent.

Indeed, the bears have come out of hibernation on Wall Street, leaving a lot of investors jittery — worried that the 10-year-old bull market has run its course, CBS News Correspondent Alexis Christoforous reports.

"We've had a lot of negative news from the Middle East, we've had negative news on the corporate earnings front," said Mary Farrell of Paine Webber.

In just the past seven weeks, the volatile Nasdaq has tumbled nearly 20 percent as high tech Wall Street darlings like Intel, Dell and Lucent Technologies warned that profits or sales would disappoint.

Not even the Dow has been immune to the selling. The blue chip index — this week led by bad news from IBM — is also down, more than 10 percent for the year, at one point dipping below 10,000 for the first time since March.

And even though uncertainty over the election is adding to the wild swings on Wall Street, most market experts remain bullish.

"If you're a believer in long-term investing, there's some great bargains out there, but it's certainly not for the faint of heart." said Art Hogan of Jefferies & Co.

And talk of a long-awaited bottom in the market surfaced late in the week when the Nasdaq clocked its third-biggest gain ever thanks to some good profit news from Microsoft.

October is historically a scary month for even the heartiest of investors. After all, the stock market crashes of 1929 and 1987 both occurred in October, as did the Asian crisis of 1997, but there is reason to take heart.

Last year, the Nasdaq began October at 2,746, only to end the year above 4,000 — an impressive gain of 48 percent. That has investors holding on to the hope for a Santa Claus rally.