Chronology of Political and Economic News and the Market's Response for Summer/Fall 1998
| Date | Incident | Economics | Gain/Loss Dow |
10/24/97 |
World market near meltdown-- Hong Kong down 1211 pts., London down 157, New York down 187; Asian woes hit Wall Street | Left blank | (187) 7,848 |
| 10/28/97 | Nuclear sales to China too "chancey", foes insist; Queries on sexual past irk Clinton | Dow takes a 554-point plunge, Asian crisis triggers 7% correction; trading halted first time since Kennedy was assassinated in 1963 | (554) = 7,161 |
| 4/10/98 | Tornadoes swept the South, killing 38 | Mutual funds fattened by biggest month eve -- [Investors put $1.7B a day into mutual funds during March = $37.5B] | 103 = 9000 first time |
| 5/27/98 | US heads for $39B surplus on soaring tax revenues | NationsBank to dominate merger (with BankAmerica) | (151) = 8964 |
| 6/4/98 (week) | Left blank | Intel sell-off sparks sharp fall in Dow; 14,000 managers apply for early retirement at ATT |
(87) = 8803 |
| 6/10/98 (week) |
Clinton defends visit to Tiananmen; Made-over Monica makes her debut in glossy fashion |
American and Philadelphia stock exchange agree to merge | (20) = 9050 |
| 6/15/98 (week) |
Clinton to raise abortion, arrest issues in China; Selective Service could easily begin calling up women | Greenspan predicts more bad news in Asia, Urges Congress to pass IMF, markets fell worldwide, Foreign investor bot bonds, said U.S. economy has largely overwhelmed the drag from Asia. | |
| 6/25/98 | Clinton to address censorship in China, U.S. businesses push renewal of MFN trade status |
ATT&TCI merge IMF ready to throw Russia lifeline; Mobile system rivals join forces (Psion, Motorola, Kokia and Ericcson in consortium to lead new communications generation) | 95 = 8924 |
| 6/27/98 (week) |
China welcomes Clinton in Chernomyrdin in Tiananmen | Dow Jones waffle; record high S&P stock keeps selling like hotcakes-- S&P finishes at 1132 | 11 = 8935 |
| 6/29/98(wk) | Pakistan is defiant as N-tests are condemned | ATT chief says he can defend deal | 3 = 8944 |
| 7/2/98(wk) | Surharto rebuilds political base to shield fortune | Japanese hopes lift markets | +97 = 9049 |
| 7/8/98 | Russians say loan by IMF may fall short of need | Investors' confidence in Russia fades further, Brazil's pension system is potential time bomb | (7) = 9085 |
| 7/10 (wk) | Senators bank sale of wheat to Pakistanis | Japanese banks cut bank on U.S. presence, GM strikes | (85) 9089 |
| 7/15 | Starr targets chief guard | Wall Street lifted by strong profits, subdued inflation | 149 = 9245 |
| 7/17/98(wk) | Lockheed Martin ends $11B buy of Northrup | Nasdaq tops 2000, Dow closes over 9300 | 94 = 9337 |
| 7/22/98 | China conducts test as Clinton visits - rocket-motor firing | Fed is ready to tighten if necessary | (106) = 9190 |
| 7/23/98 | Greenspan raises prospect of market's fall again (Triggers a sharper reaction in Europe with bigger falls on exchanges in Paris, Frankfurt & Madrid) | Market tumbles again -- Greenspan warns market ready for fall; IMF funding measure shelved amid Republican infighting |
(61) = 9128 |
| 7/24/98 | No item listed | Stocks plunge 195 points--earnings woes seen as impetus; finishes below 9000 | (195) = 8933 |
| 7/25/98 (week) |
Gunman shoots his way into Capitol, 2 officers killed; Injured Suspect held- - In the hallowed halls, tranquillity vanished |
Dow up slightly; ends week off 401; up 13% for year | 4 = 8937 Week Dn 401 |
| 7/29/98 | Lewinsky gets immunity, will say Clinton lied | Consumers grow edgy, confidence high | (93) = 8934 |
| 7/31/98(wk) | Lewinsky's dress to get DNA test | Left blank | (7) = 9085 |
| 8/4/98 | Court [shrouded] in secrecy- - much under wraps in 2 Clinton cases | lndex signals manufacturing slide, reflects Asia crisis; GM strikes | (97) = 8787 |
| 8/5/98 | Dow dives 299 points | GM shutdown causes drop in indicators | (299) = 8487 |
| 8/6/98 | After wild swing Dow closes up | Asian woes apply brakes | 59 = 8547 |
| 8/8/98 (week) |
Clinton vows to find and punish bombers (the bombing of US embassies occurs on Friday - no market response) | Jobless rate holds steady at 4.5% | 20 = 8598 |
| 8/11/98 | As rescue teams work, $2M reward is set | Bell Atlantic strikes | (23) = 8575 |
| 8/12/98 | BP to acquire Amoco; Bell deal ends strike |
Industrials lose 112 points on troubles abroad; Global stocks slide on fears over economies; 770.9 million shares trade- - 5th highest | (112) = 8462 |
| 8/13/98 | Kenya has two suspects in bombing | Dow rallies as techs set strong pace | +90 = 8553 |
| 8/14/98 | Bodies return to US soil; Clinton weighs nuance of "sex" | Fears over devaluation send Russian markets into dive | (94) = 8459 |
| 8/15 (end wk) | Clinton may admit sex with Lewinsky | Stock markets stage recovery after week of falls worldwide | (35) = 8425 |
| 8/22/98 (week) |
Afghan damage moderate to heavy; Across area, security is stepped up" |
Stock markets shaken by currency devaluation fears; stocks fall in world markets; fear turmoil Asia/Russia; Market dives 283, closes dn 78 | (78) = 8533 |
| 8/26/98 | Ruble falls 9% on economy fears | Indicators give mixed signals on economy | +36 = 8602 |
| 8/27/98 | Investors face $33B losses from Russian bond default; Chernomyrdin in urgent talks with IMF |
Dollar to yen: 1.44; Durable goods sales surge, easing fears in U.S. over Asian woes; GM strikes | (120) = 8,600 |
| 8/28/98 | Global effort nets suspect in bombing embassy; Yeltsin ouster sought in financial mess-- Dow plunges | Corporate profits hit by Hong Kong recession; Russian crisis hits world markets; Jobs still readily available despite economy cooling | (357) = 8166 (Feb level) |
| 8/29/98 (week) |
Defiant Yeltsin won't step down--Dow tumbles again amid global fear; Clinton speaks of forgiveness, but doesn't ask for it |
3M to close plants and shed 4,500 jobs | (114) = 8051 |
| 9/1/98 | Dow plunges 512.61 points, 6% drops erases year's gains as global economic woes continue | As stocks drop, local investors keep chins up; second worst day ever | (513) = 7539 LOW FOR YR |
| 9/2/98 (wk) | Investors ignore bears' snarls | Billionaires are battered, top managers take a bath; In August, $1.9B flowed out of stock funds vs. the 1998 average monthly inflow of $20.8B | 288 = 7827 |
| 9/15/98 | Clinton fights back with rebuttal of Starr charges, "sinner" is repentant at breakfast; Duma backs Soviet-era chiefs-- Primakov | Starr charges fail to hurt U.S. stocks; Nikkei tumbles after U.S. slide; Dollar to yen: 1.33 | 180 = 7795 |
| 9/18/98(wk) | House Republicans balk at full funding for IMF | Asian woes help push U.S. exports to low level | (216) = 7874 |
| 9/22/98 | Clinton tells U.S. terrorism is at top of world's agenda; Impeachment bid is renewed by panel members | U.S. markets not spooked by Clinton testimony; Battle for skies broadens with "Oneworld" alliance | 38 = 7933 |
| 9/24/98 | Pakistan will sign nuclear test ban, even if India does not | Greenspan warns of effects of global crisis on economy; Markets surge on interest rate cut; Fed moves to help hedge fund | 138 = 8036 |
| 9/25/98 (week) |
Long-Term Capital Management has market exposure of $200B, EPA tells 22 states: cut emissions | Dow-Jones lower after near collapse of hedge fund; World Bank sounds alarm over risky emergency loans | (152) = 8,002 |
| 10/1/98 | U.S. rate reduction fails to excite investors | Dow tumbles 230 points as bonds soar | (230) = 7843 |
| 10/2/98 (week) |
U.S. is poised to lead strikes over Kosovo; Jordan contradicts Clinton on Lewinsky (WP); Mounting gloom for investors as stocks fall, Rubin offers global plan (WP) | Greenspan: Fed aided fund bailout to shield global economy; Day of decline roils world stock markets, Dow falls 2.7%, Nasdaq drops 4.8%; Dollar to yen: 1.35 | (210) = 7,633 |
| 10/8/98 | Scores of Democrats likely to back impeachment probe; Russians protest economic woes | Fed chief signals bigger rate cut, Greenspan cites weaker economy; Banking reform remains in doubt | (1.5) = 7740 |
| 10/9/98 (week) |
Impeachment inquiry opened; Military tells plan for attack on Serbs | Global crisis hits declining dollar, Dollar drops 8%, worst one day drop in 25 years to 118.30 on yen for third day in row; Dollar down against yen 20% from August high, IMF agrees on Brazil funds | (10) = 7731 (Yr. low 7539) |
| 10/14/98 | Tentative accord reached on IMF funds; Conditions; NATO approves airstrikes on Yugoslavia; Hyde may narrow impeachment charges | Reforms ok'd for IMF seen as ineffective; Japanese plan gives world markets a lift; Monsanto & AHP call of marriage | 101 = 8001 |
| 10/15/98 | Panel split on calling Lewinsky; Hill, Clinton "wrapping up" details of huge spending bill; Doctor succeeds in fertilizing egg with 2 mothers | House IMF bill makes few gains, Legislation to reform bankruptcy law goes belly-up in Senate | 30 = 7968 |
| 10/16/98 | Negotiators reach accord on spending; Worried Fed cuts interest rate again in an effort to prevent the slowing economy and nose- dive financial markets from tripping the U.S. into a recession | Rate cuts buoy markets and consumers, Banks lower cost of money, stocks surge 330 points ; Market up highest for week in history. | 330 = 8299 |
| 10/31/98 | Economy appears healthy as consumers keep spending | Dow spurt brings rebound to 15%; Dow has biggest one month gain since 1987. Dow up 1100 pts from Oct. 8 low drop | 97 = 8592 |
Notes: Sources: The Baltimore Sun, The Washington Post, The Washington Times and The Financial Times.
The bold line on the right represents a change in trading patterns of the stock market. The shading denotes days of unusual activity.
There is about $5 trillion invested in mutual funds. For years, investors have been investing as much as $20 billion a month.
The Federal Reserve announced on September 1 that they would make $50B in cash available to the system in light of Y2K.