UA community feels stock market drop

Many at the University of Arizona felt the sting of the 6 percent drop, since some university endowment and employee retirement funds are both market-based.

The Dow Jones Industrial Average dropped 512.61 points yesterday, ending the session at 7,539.07 and contributing to a combined $2.3 trillion loss since July 17.

Still, most UA professors, students and staff took the news in stride, although some TV news reports compared it to "Black Monday's" 22.6 percent, 508-point drop in October 1987.

A UA staff member, who wished only to be identified as Janet, said her stocks and retirement fund were affected by yesterday's sharp decline.

"We lost, but hopefully it will level off," she said. "You can't take all your money out that's not a good idea."

Gerry Baumann, an educational leadership graduate student, said although her money is tied up in safer, long-term investments, she is concerned that it will be more difficult to buy a home.

"I think it's just a readjustment," she said. "But it will directly impact me because I'm in the process of buying a new home."

Justin Galea, an economics and management information systems sophomore, said he won't lose sleep over yesterday's market decrease, even though he lost $2,800 on one of his holdings alone.

"I'm in it for the long, long run," said Galea, who owns 200 shares of Yahoo! Inc., which lost 14 1/16 yesterday to end the day at 69. "This is a bump in a long ride for me. I'm worried, but not scared."

Galea's holdings in Yahoo!, an Internet service, have lost 25 percent of their value in less than a week, but the shares still have gained more than 400 percent over the past year.

The technology-dominated Nasdaq composite index also had its worst point loss in history, losing 140.45 points and closing at 1499.23.

Many major overseas markets suffered significant declines, including organizations in Hong Kong, Germany, Switzerland, Italy, France and the Netherlands.

Singapore's benchmark index fell 28 points to 856.43, leaving it below the 900 level for the first time in 10 years.

Galea attributed yesterday's slide to panic selling because of the economic situation in Russia, but said that it has opened up an incredible opportunity for investors to turn a profit.

"The prices are too low," Galea said. "It's like walking into the store and seeing a pair of jeans or a shirt for 75 percent off. You can't pass that up."

Charles Schnitzlein, a UA assistant finance professor, said the stock market drop is not quite as significant as many financial commentators are making it out to be.

He said news reports comparing yesterday's losses to "Black Monday" were exaggerated.

"It's not necessarily dramatic at this point," he said.

Schnitzlein also said the market is near the point where it started at the beginning of the year.

"It's still an expensive market, and there's certainly a lot of risk," he said.

According to Schnitzlein, the Japanese market deserves much of the blame for yesterday's drop.

He said changes will come if the Japanese "get their act together."

Mark Zupan, business and public administration dean, also blamed Japan's financial mess.

"The loss on the Japanese stock market last week was as big as Russia's gross national product," he said.

Zupan also offered some advice for the near future.

"Unless you have inside information on a particular company, the best short-term strategy is to hold," he said.

And reinforcing the minimal effects yesterday's activity had on long-term investors, Zupan said prior market gains overshadow recent troubles.

"The market has probably increased 100 percent," he said. "We've benefited more over the past four years then we've lost in the past two weeks."