Word: stockings
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Dates: during 1990-1999
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Only 21 months ago, with the Dow at 6500, Greenspan was warning against "irrational exuberance" in the stock market. Several other wise elders expressed hope that last week's correction will have the cleansing effect of strengthening the historic relationship between stock valuations and the earnings of the underlying companies--a notion that had fallen out of favor after years of "momentum investing," in which all that mattered was that someone would buy the hot stock that some greater fool would soon bid up to an even higher price. The price-earnings ratio for the S&P 500 has approached...
...that flows in and out of equity mutual funds. In August, a month that included several gut-wrenching weeks, there was a net outflow of $5.4 billion, or well under 1% of the total invested in equity funds. Though this was the first such exodus since the recession and stock slump of 1990, the number is still quite modest when compared with the 4% that fled equity funds after the October 1987 correction. Last week investors pulled a net $6.2 billion out of stock funds Monday and Tuesday, but on Wednesday a net $6.5 billion flowed right back...
...told, U.S. financial institutions had losses mounting to $8 billion by week's end, and one of the fears that drugged the stock market was that U.S. companies might face even larger losses in Latin America, where they have much more exposure (about a third of U.S. exports) and where currencies came under fresh assault late last week. Brazil saw $11 billion in capital fleeing the country in the past five weeks--not because its economy is weak but because of each investor's fear that other investors might flee any economy slurred with the label "emerging." Money also fled...
Other companies that took major hits were transportation stocks whose business involves trade and travel: the parent companies of such airlines as American, United and Delta. Companies like Coca-Cola, Procter & Gamble and Gillette, which not long ago were praised for their successful penetration of global markets, last week were punished harshly through stock sell-offs. General Electric, the world's most valuable public corporation and one of the most admired, fell 22%, losing $68 billion of its market value...
...returns to wealthy investors. After famed investor George Soros lost $2 billion in Russia, John Meriwether's Long-Term Capital Management announced that it had lost $2.1 billion, or half its asset value, so far this year. "Russia and Asia became the trigger for the correction in the U.S. stock market," says David Wyss, chief economist at DRI/McGraw-Hill, a consulting firm. "Although there had already been a softening in earnings over the past few quarters, traders needed to be hit with a two-by-four to make them realize you just can't get double-digit increases in earnings every...