Securities Industry United States

The nation's top securities regulator warned investors Thursday about the dilutive impact of stock options on their shares and urged them to make their voices heard as the Nasdaq Stock Market considers new rules for shareholder approval of options for executives.

Fear of American economic weakness is spreading to many of the world's other major economies, making it less likely that they--and the U.S.--can dodge a substantial slowdown or recession. Worries about global growth made a speedy, round-the-world trip in financial markets Wednesday, starting with warnings about a new round of Japanese bank trouble. The domino-like events reminded many of the frightening financial contagions of the late 1990s and put Washington policymakers on high alert.

Retired pharmaceutical executive Edward Adams sees nothing unusual in the way he holds his stocks: on paper certificates in a bank's safety deposit box, backed up by records held in his house safe. "I don't know the security of their system, but I know the security of mine," Adams said from his suburban Philadelphia home. "Could [the brokers' system] be compromised in some way? Could a blip erase your holdings? I have no idea."

U.S. and European stocks could drop 15% to 20% in the next several months, and the decline is likely to drag Asian markets lower as well, strategists at Morgan Stanley Dean Witter & Co. warned Tuesday. The firm raised the cash weighting in its "Macro Navigator" model portfolios and reduced its exposure to U.S., European and Asian stocks, according to a report by investment strategist Robert J. Pelosky.

The economy grew at a red-hot annual rate of 5.8% during the last three months of 1999, the government reported Friday. But inflation also showed signs of reawakening, triggering a wave of selling in the stock market in anticipation of vigorous interest-rate hikes by the Federal Reserve. Growth for all of last year was a robust 4%, making 1999 the third straight year in which economic output grew by at least that much.

In another backlash against globalization, activists are pressuring the U.S. government to restrict foreign access to the powerful U.S. stock and bond markets. Their target is the growing practice by foreign firms with questionable ties to rogue nations of raising money on Wall Street. Though the United States has banned trade and other financial dealings with some nations over the years, its capital markets have always been accessible to any foreign companies that meet investment standards.

Chinese investors took a very different view Thursday of normalized U.S.-China trade relations than did U.S. investors. China's main domestic stock indexes rose to record highs as local investors snapped up shares after the U.S. House voted late Wednesday afternoon to grant China permanent normal trade status. But shares of many Chinese companies trading on U.S.

It wasn't just you and your neighbors caught in the frenzy for "new-economy" stocks in the first quarter of this year. Data reported Tuesday show that foreign investors bought a record net $62.7 billion of U.S. shares in the first quarter, compared with $107.5 billion worth they bought in all of 1999, according to the Securities Industry Assn. The unprecedented demand in the first quarter "was a record vote of confidence in the U.S.

The Securities and Exchange Commission, in an assist to start-up companies and their investors, is expected to reduce the period for which an investor must hold privately placed stock before reselling it in the public market, SEC officials said Wednesday. Commission approval of the Rule 144 amendment, which was proposed for public comment in 1995, could come as early as next week, said Brian Lane, SEC corporation finance director. Both SEC Chairman Arthur Levitt and Steven M.H.