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Friday, April 30, 1999 Published at 10:49 GMT 11:49 UK

Business: The Economy

Wall Street rollercoaster

The US stock market had a wild end of the month

The stock market rally on Wall Street has come to an abrupt halt.

Share prices on Wall Street collapsed after the Dow Jones index of leading shares had come within 39 points of the 11,000 points level.

At one point the Dow dropped more than 223 points.

Trading remained highly volatile during most of the session and when trading ended, the Dow was down 89.34 points at 10,789.04.

This follows Thursday's 10,878 points record close, the twentieth of the year.

Technology stocks continued to have a wild ride.

At the start of the day they appeared to be back in favour with the Nasdaq index gaining strongly. But during the afternoon share prices suddenly crumbled.

The Nasdaq index lost more than 45 points, before staging a rapid recovery and edging back into positive territory again, ending the day up 14.44 points at 2,542.88.

Spectacular gains

Despite the turmoil the markets have managed to defend their recent gains.

"It has been one of the most spectacular months ever for the Dow," said Scott Bleier, chief market strategist for Prime Charter Ltd.

The Dow surged 11% in April until Thursday's record close and is up more than 18% for 1999.

The Nasdaq index has seen a 16% gain this year.

Economic boom

One reason for the market performance is the strength of the US economy. New data show that it continues to grow at a breath-taking rate - 4.5% during the first quarter of the year.

But on Friday this was not enough to boost share prices.

Some analysts seem to fear that the strong growth is bound to increase inflationary pressures - and the prospect of a rise in interest rates. At the same time traders reported a lot of profit taking after the rally of the past days.

Europe in the shadow

European shares, meanwhile, tried to shadow Wall Street's early success, but were not as buyoant as US stocks.

In London the FTSE 100 index of leading shares closed at 6,552.2 up 54.6 points - well below the day's peak of 6,585. Traders said that share prices had been boosted by the strong performance of Wall Street.

Leading German and French shares were also up, with Frankfurt's Dax index gaining 37 points to 5,360 and the Paris Cac 40 index up 33 points at 4,405.

However, the rise in world markets was not mirrored in Japan, with the Nikkei average of leading shares closing down 240 points at 16,701.

It was the last day of floor trading on the Tokyo Stock Exchange. After a five day break for the 'Golden Week' holiday, trading will resume on Thursday with computers replacing the 'open outcry' system.

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