bbc Tuesday, 3 April, 2001, 16:16 GMT 17:16 UK

Shares hit new lows

More losses on the US markets as political tensions rise US stock markets are on the slide again, as the falling value of technology companies sends the Nasdaq sharply lower.

The Nasdaq, home to most of the big internet and telecoms-related firms in the US, lost 5% of its value by early afternoon in New York, having ended Monday at its lowest levels for 29 months.

By 1430 in New York the Nasdaq index was down 96 points to 1,687. The blue chip Dow Jones Industrial Average was also sharply lower, down 251 points to 9,527.

The fall in New York meant that most stock markets are now back at their lowest levels for two years or more, with the past two weeks of gains more or less wiped out.

Reasons for gloom

A combination of reasons were given, including more tech worries following profits warnings from software firm Ariba and American Express on Monday, job cuts at Alcatel.

There was also the political tensions between the US and China and further signs of economic slowdown, with US factory orders slipping in March.

In Europe, the mood was bleak with London's benchmark FTSE 100 index ending nearly 3% lower at 5,463, its second lowest closing level for more than two years.

The Techmark 100 index, reflecting the value of the leading technology based firms, ended 8% lower at 1,771, easily its lowest level to date, and less than 30% its value of a year ago.

The French Cac 40 shares index and the German equivalent, the Dax, were both about 4% lower as the trading day ended.

Earlier in Asia, there had been a mixed performance with Japan's Nikkei gaining more than 1%, and Hong Kong's Hang Seng falling by 1%.

Monday in the US

On Monday the Dow Jones Industrial Average had shed 100 points, or more than 1%, to close at 9,777.

The technology-laden Nasdaq composite index had finished down 57 points at 1,782, its lowest closing level since late October 1998.

Stronger-than-expected manufacturing data also did little shore up the markets.

A closely watched index of US manufacturing activity - the National Association of Purchasing Management - showed signs of improvement in March for the second month in a row.

"I don't think it adds any certainty to investors' uncertainty about the future," said Brett Gallagher, head of US equities at Julius Baer.

Last quarter

The first quarter of 2001 ended with US share prices in the doldrums.

The Dow Jones index suffered its worst first-quarter performance since 1960, ending down 9% at 9,870 points since the beginning of the year.

The first-quarter picture for the Nasdaq index wasn't pretty either.

It closed at 1,839 points, 26% lower than where it started the year. It has lost more than two thirds of its value in the past year.

-- Anonymous, April 03, 2001