Stocks fall again, but not as far

Roller-coaster Dow tops 9,000, then closes at 8,903

Nasdaq off 24 points

Markets calm down

many traders out for Rosh Hashana

September 19, 2001|By Bill Atkinson | Bill Atkinson,SUN STAFF

Wall Street calmed down yesterday, but stocks continued to slide the day after the Dow Jones industrial average suffered its single biggest point loss and trading volume soared to record levels.

The bellwether Dow, made up of 30 companies, slipped 17.30 points yesterday to close at 8,903.40. The Dow fell shortly after the markets opened, eventually rose above 9,000, slid to 8,861, then rallied slightly before the closing bell.

The Nasdaq composite index dipped 24.47 points, or 1.55 percent, to 1,555.08. The Standard & Poor's 500 index, a broad measure of the market, fell 6.03 points to 1,032.74.

Many traders had hoped for a rebound after Monday, when the Dow plunged 684.81 points, or 7.13 percent, after opening for the first time since the terrorist attacks Sept. 11.

"I am a little disappointed that we couldn't sustain the rally, but I am not surprised," said Angel Mata Jr., head equity trader at Legg Mason Inc. in Baltimore. "It seemed like a lot of news was coming out on how the U.S. is going to deal with the crisis. Those rumblings kind of spooked the market."

The Russell 2000 index, a benchmark of small-cap stocks, slid to 411.66, and the Wilshire 5000 total market index, the broadest measure of U.S. stocks, slumped 74.38 to 9,616.31.

The Sun-Bloomberg index of the top stocks in Maryland fell 2.46 to 181.40. Human Genome Sciences Inc. tumbled $3.95 to $32.86, and Compudyne Corp. lost $1.72 to $11.28.

In contrast to Monday, when a record 2.36 billion shares traded on the New York Stock Exchange, 1.6 billion shares changed hands yesterday. Some traders were on holiday for Rosh Hashana.

Though the market's mood has been bleak, many experts think it is nearing bottom.

"I get the feeling that the worst is over in terms of magnitude," said David Straus, senior portfolio manager at Johnston, Lemon Asset Management in Washington. He thinks the Dow could slip to 8,500 but that it should hold steady there and could rebound in the fall.

Others agreed, saying that if the market falls further, it probably doesn't have too far to go.

"We have to be patient for the balance of 2001, and then in 2002 the stock market is going to turn around," said Gordon Croft, vice president of Croft-Leominster Inc., a Baltimore money management firm.

The economy is weak, however, and could be in recession, they said, and another terrorist attack or a protracted ground war could send the market skidding.

But the market could rise with the surrender of Osama bin Laden - the Islamic militant who is the prime suspect as the mastermind of the terrorist attacks.

"The $64,000 question is what happens the rest of the week," said Brian Rogers, who oversees two mutual funds at T. Rowe Price Associates Inc. "I don't think anybody can answer that."

Many stocks have fallen in price and are attractive buys, money managers said.

Yesterday, airline stocks rose after enduring double-digit dollar losses Monday because of large layoffs and an estimated $1 billion in losses they will suffer in the wake of the terrorist attacks.

Shares of United Airlines parent UAL Corp. rose $1.49 to $18.99; Delta Air Lines Inc. gained $2.29 to $22.93; AMR Corp., parent of American Airlines, rose $2 to $20; and US Airways Group Inc. rose 24 cents to $5.81. America West Holdings Corp. gained 30 cents to $3.30.

Among the biggest decliners were several small reinsurance providers. Ace Ltd. fell $2.52 to $25.99, PartnerRe Ltd. lost $3.01 to $34.10, and XL Capital Ltd. slid $3.01 to $68.60.

American International Group Inc. fell 95 cents to $70.05, and Chubb Corp. lost $1 to $62.05.

Walt Disney Co., whose revenue might decline at its theme parks if nervous travelers stay home, fell for a second day, losing 85 cents to $18.40. Online travel agent Expedia dropped $4.36 to $19.64.

Among Dow stocks, American Express Co., which issued a third-quarter profit warning late Monday, skidded $2.87 to $27.38; International Business Machines Corp. rose $3.06 to $94.86; and Microsoft Corp. advanced $1.41 to $54.32. Wal-Mart Stores Inc. rose $1.35 to $45.35.

General Electric Co., which makes aircraft engines and faces insurance losses from the destruction of the World Trade Center towers in New York, fell $1.30 to $33.85. United Technologies Corp., a GE rival in the aircraft-engine business, rose $1.57 to $49.07.

Boeing Co. dropped $2.66, or 7.4 percent, to $33.14, adding to an 18 percent loss Monday.

Makers of business software that tracks customer accounts fell, including PeopleSoft Inc., which shed $4.49 to $20.46, and Siebel Systems Inc., which dropped $1.94 to $14.77. PeopleSoft and Siebel were among the stocks leading the Nasdaq lower.

Oracle Corp. gained 37 cents to $11.38.

Immunex Corp. climbed 90 cents to $17.09. The drug maker will be added to the S&P 500 after exchanges close tomorrow, Standard & Poor's said.

Long distance providers such as AT&T Corp. and Sprint Corp. climbed. AT&T rose 78 cents to $18.30, and Sprint added 54 cents to $22.13.

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