Nasdaq stocks sink due to worries over downturn

Despite the Federal Reserve Board's move to lower the key federal funds overnight bank lending rate and rediscount rate, the Nasdaq composite index on the New York Stock Exchange plummeted by 6.2% Friday.

Despite the Fed¡¯s interest rate cut, the Nasdaq index began to plunge immediately after the opening bell and lost 159.18 points (6.2%) from the previous day to close at 2,407.65. The plunge was attributed to fast-spreading worries over the gloomy prospects for the U.S. economy. The Dow Jones industrial average followed suit, falling 250.40 points (2.29%) to close the day at 10,662.01.

The Nasdaq market collapse seems to have resulted from widespread concerns that the Fed¡¯s abrupt move may indicate worse-than-expected economic prospects.

Commenting that it usually takes several months for interest rate cuts to have a measurable effect, experts analyzed that the Fed lost a chance to pull down interest rates last year.