Tens of billions of dollars were wiped off the value of America's leading companies on Friday as its stock markets suffered one of their blackest days. New York's already nervous financial markets were sent into freefall by figures showing that inflation rose at its fastest rate for five years in March. At the end of a tumultuous week's trading all the major stock market indexes tumbled. The blue chip Dow Jones industrial average finished down 616 points at 10,307. That was a record fall in terms of points, although in percentage terms the 5% drop does not make it to the 10 worst days in its 103 year history. But the pain was even greater for the tech stock dominated Nasdaq, whose benchmark index was down nearly 10%, or 355.6 points, at 3,321. That its biggest one day points fall on record and its second worst day in terms of the percentage drop. It has lost more than a quarter of its value this week. It is 35% below the 5,000-plus peak set last month. The slump was seen as confirming that the technology "bubble" has now been punctured. Analysts said the falls were not a fully fledged crash but did appear to signal the long awaited correction in the inflated valuations placed on internet and technology-related companies. The apparent spark for the latest falls in an already declining market were figures showing that inflation in the US posted its highest jump in five years during March. Europe falls in line This raises the chance of further interest rate rises in the US, which make shares a less attractive proposition for investors. But there had also been growing concern that technology and internet related firms have risen to unsustainably high levels. The big beasts of the technology jungle in the US have shown the scale of the decline, with Microsoft shares down to 74.5 from their all time high of 120. That fall has wiped more than $230bn from its market value. There is likely to be a knock-on effect for Asian and European markets on Monday, which were closed by the time the losses in America started approaching record levels. The early falls in New York did add to the decline in Europe with London's FTSE 100 index ending Friday at 6177.8, down 179 points. Big fallers included high-tech firms, with handheld computer maker Psion losing nearly a quarter of its value as it closed at 2,630p. That is one third of its peak reached in March Other losers included Baltimore Technologies, down 24% at 5,344p, Arm Holdings and Kingston Communications, down 10% to 686p. In Frankfurt, the Dax closed at 7,214.3, down 234.2 points, or more than 3%. The Cac 40 in Paris ended 3% lower at 6,065.7. For the week the FTSE 100 was down 391 points, the Dax down 308 points and the Cac down 243 points. Friday's 9.7% fall for the Nasdaq was its biggest ever fall, topping the 7.6% and 7.1% suffered on 3 April and 12 April respectively. It is now back at the levels it last saw in November last year. The Dow Jones Industrial Average has had a volatile year to date, with its closing value comfortably above its lows of last month - but also more than 6% down on its start of year levels.
