While the media had years to ponder the Y2K boondoggle, yesterday's careening stock market left news outlets scrambling to explain to readers what had gone so wrong so quickly.
Wall Street may have applauded Clinton's reappointment of Fed Chairman Alan Greenspan to yet another term, but the wacky world of the Nasdaq Composite Index steps to its own drummer. Just a day after a record close of 4131, the Nasdaq suffered its worst single-session point loss ever, plunging 229.46 points, or 5.6 percent, to 3901.61. The Wall Street Journal boxed up the worst casualties in a chart: "Companies that Helped Bring Down the Nasdaq." CMGI was off 32.69 percent; Yahoo, 32 percent. Even Wall Street fave Qualcomm hit the skids with a 17.25 percent fall.
Most outlets were optimistic that the boom times would soon be back. Jon Olesky, head of block trading at Morgan Stanley Dean Witter, told TheStreet.com's Brian Louis that the usual seasonal flow of money from pensions, retirement accounts and bonuses has been delayed because of Y2K concerns. The Washington Post's page-one coverage was confident that the stock-market willies were the result of investors hoping to outrun the Federal Reserve's expected raise in interest rates next month. CBS MarketWatch's Cecily Fraser even chided investors for finally wising up.
The New York Times wasn't so sure the Fed was the cause, however. The paper ticked off the list of usual suspects behind the plunge but added that there was little new to explain it, according to the front-page analysis by Kenneth Gilpin and Floyd Norris. They pointed out that January is often a good month for stocks, but not always at the beginning of the decades.
FreeMarkets would no doubt agree. The Internet business auctioneer, famed for its December IPO's 483-percent stock run-up, yesterday announced that its second largest client, a small operation called General Motors, was leaving for rival CommerceOne. GM accounted for 17 percent of FreeMarkets' revenues, and the news squashed the company's stock value by 19 percent. The Wall Street Journal scored with a nice look at what FreeMarkets means to Pittsburgh, but Steel City's own newspaper had the last word. The Pittsburgh Post-Gazette pointed out that, right on cue, FreeMarkets' underwriters had released sunny reports on the company's future prospects. Guess no one ever told them that timing is everything.