The Dow Jones industrials dropped sharply in late afternoon trading today amid news of a parliamentary showdown in Russia and North Korea's apparent firing of a missile over part of Japan.
Shortly after 3 p.m., the Dow average was down 300.98 at 7,750.70, wiping all of this year's gains. The Dow ended 1997 at 7,908.25.
If the blue-chip average doesn't recover more by the end of the day, it would close below the 8,000 mark for the first time since Jan. 30.
Today's losses deepened last week's plunge of 481.97 points, or 5.6 percent, in the Dow. That was the biggest percentage drop for a calendar week since 1989. The Dow closed Friday down 13.8 percent from its record high closing of 9,337.97 on July 17.
Broad-market indicators also were sharply lower this afternoon, with the NYSE composite down 8 at 504.10, the American Stock Exchange's market index down 14.17 at 588.41.
The Nasdaq composite dropped 102.29 to 1537.39, the Standard & Poor's 500 composite down 36.65 at 990.49, and the Russell 2000 down 12.60 at 345.94.
The Dow fell 550 points in the past three sessions, taking it well below its July 17 record of 9,337.97. That's the steepest drop since a 21.2 percent slide triggered by the Persian Gulf crisis in the summer and fall of 1990.
In Russia, the communist opposition said today it would block the approval of Boris Yeltsin's choice for prime minister, despite Russia's growing economic crisis. Acting Prime Minister Viktor Chernomyrdin warned Russia was on the edge of chaos and pleaded with lawmakers to approve the formation of a government to tackle the crisis.
Russian and Japanese economic troubles have roiled Wall Street, prompting fears of lower corporate profits and a global economic slowdown.
Twenty-two of the 30 Dow industrial stocks were lower, led by Merck, Wal-Mart, down 3 3/8 at 62, and IBM, down 3 5/1 6 at 119 1/4 .
Technology stocks were hard hit, with Compaq leading the Big Board names in volume and down 1 7/1 6 at 29 5/1 6. It was followed by America Online, down 7 1/4 at 89, and Lucent Technologies, down 4 1/2 at 76.
Drug makers also took a beating, with Merck down 4 3/8 at 123, Pfizer down 3 2/2 6 at 98 9/1 6, Warner-Lambert off 5 7/1 6 at 69 1/1 6, and Eli Lilly down 3 1/4 at 69 1/4 .
Declining issues outnumbered advancers by a decisive 3-to-1 margin on the New York Stock Exchange, where volume came to 573.72 million shares.
European markets fell. Germany's DAX Xetra index and France's CAC 40 Index both dropped 1.8 percent. The Bloomberg Europe 500 index fell 1 percent. London markets were closed for a holiday.
Asia's biggest stock markets were mixed. Japanese shares rose, pushing the benchmark Nikkei 225 index up 1.4 percent from Friday's 12-year low after Sakura Bank Ltd. said it will raise capital by issuing new shares to a group of companies including Toyota Motor Corp. That reassured investors that struggling banks will find ways to boost capital.
In Hong Kong, the government stepped back from the city's stock market after a two-week, $12.5 billion buying spree, sending the Hang Seng Index down 7.1 percent, its steepest decline since January.
Dell Computer fell 4 1/2 to 114 1/4 and Intel Corp. dropped 1 3/8 to 75 5/8 . Oil stocks gained, led by Texaco Inc., after Royal Dutch/Shell Group, the world's biggest public oil company, said it's in talks with Texaco and other international oil companies that might lead to a merger.
"The market is trying to adjust to the fact that earnings growth is not going to be too robust," said Donald Selkin, chief market strategist at Joseph Gunnar & Co., a New York brokerage.
Financial shares, which slumped last week on concern that tumbling markets around the world would slash earnings, recouped some of those declines. J.P. Morgan & Co. rose 1 1/2 to 99 1/4 after dropping 19 percent in the last three sessions. Late Friday the bank said trading revenue so far this quarter is about $300 million, down from $657 million in the same quarter last year.