Sell-Off Sends Dow Down 50; Average Plummets 86 Points, Then Rallies Before Close
NEW YORK, Oct. 26 -- The stock market endured a sharp, if temporary, drop of nearly 86 points in the Dow Jones industrial average today and continued a week-long decline that many analysts said might signal a long-anticipated pause in the great market surge of 1995.</br></br>The Dow recovered late in the day to finish at 4703.82, or 49.86 below Wednesday's closing. Since its mid-September all-time peak of 4802.45, the Dow has declined nearly 100 points, or about 2 percent.</br></br>Analysts said several factors had influenced today's plunge, including fears of international instability caused by Russian President Boris Yeltsin's illness and a further drop in the Mexican peso, as well as some signs of rising consumer debt and durable goods orders. Uncertainly about the impact of budget and health care changes in Washington also had an impact, they said.</br></br>"It was an extraordinary confluence of negative events, some justified and some overdone," said Timothy Straus, senior vice president for institutional sales at Prudential Securities in Boston.</br></br>Some analysts are predicting at least a 5 percent correction, their word for a small market decline after a long upsurge, before the end of the year. "This is a gradual correcting process that began back in September, and for some stocks as far back as January," said Richard McCabe, first vice president and chief market analyst at Merrill Lynch.