Dow closes down 681 points as market reopens for first time since terrorist attacks
Monday, September 17th 2001, 12:00 am
By: News On 6
NEW YORK (AP) _ Skittish investors sent stocks plummeting Monday on Wall Street's first trading day since last week's terrorist attacks. The Dow suffered its biggest one-day point drop and closed below 9,000 for the first time in more than 2 1/2 years.
The resumption ended the stock market's longest shutdown since the Depression.
The Dow ended the day down about 681 points at 8,924, or a fall of 7 percent, according to preliminary calculations. Its previous record for a one-day drop was 617.78, set April 14, 2000.
The heavy selling was widely expected in a market already fragile because of poor corporate profits and outlooks. And since the attacks, which closed the nation's stock market for four days, the major airlines have announced cutbacks and reduced schedules, adding to investors' nervousness.
But the Federal Reserve, hoping to boost the economy and the market's confidence, cut interest rates by a half-point an hour before trading began. It was the eighth rate cut so far this year.
Financial leaders had called on investors to treat the market's reopening as a buying opportunity instead of a reason to sell.
New York Stock Exchange chairman Richard A. Grasso was sanguine about the volatility after the opening bell: ``Today's market is not important. It's the market a year from now, two years from now.''
Many investors didn't seem to be unnerved by the market's drop.
``In fact, the reaction has been just the opposite,'' said Ronald Loftus, a broker in Springfield, Mass. ``Some people are looking to buy primarily out of patriotism and to show their support. They are saying it's something they can do.''
The Dow fell in 50- and 100-point bursts as its 30 components opened for trading. When American Express, the last Dow component to open, began trading the Dow's loss surpassed 600 points and the index fell below 9,000, dropping to 8,976. The blue chips last closed under 9,000 on Dec. 3, 1988, when they fell to 8,879.68.
The market fluctuated as expected throughout the day, with the Dow recovering to a loss of about 460 points before turning lower again in the afternoon. Shortly before 3 p.m., the index was off 721.56, reaching its biggest-ever intraday decline, topping the 721.32 it fell on April 14, 2000.
The Nasdaq composite index fell 115 points and the broader Standard & Poor's 500 index was down 53.
While the point declines in the Dow and Nasdaq were very large, their percentage losses were more moderate, with both indexes off about 7 percent. By comparison, the Dow dropped more than 22 percent when it lost 508 points in the crash of 1987.
Before trading started, the New York Stock Exchange observed two minutes of silence followed by the singing of ``God Bless America.''
The opening bell was rung by members of the police and fire departments along with representatives of other agencies involved in the rescue and recovery efforts at the World Trade Center disaster site.
``Let us celebrate these wonderful men and women,'' said NYSE Chairman Richard A. Grasso.
Outside, a huge American flag was draped across the NYSE's famed columns.
The four-day market closing was the longest for the NYSE since March 1933 when the government shuttered the exchange for more than a week for a banking holiday during the Depression.
Despite concerns about traders making it to work, it appeared there were the usual 3,0000 traders and other employees on the NYSE floor. Still, the physical effects of last week's attacks lingered _ the trading floor smelled heavily of smoke.
The American Stock Exchange, forced out of its home by damage from the attack, operated out of a handful of posts clustered in one area of the NYSE.
Jay Mahoney of Wagner Stott Bear Specialists said he had more workers than he needed to operate Monday.
Asked if people were nervous about returning to the financial district, he said: ``I thought that might be a concern. Over the weekend it seemed like a lot of people talked about being nervous. But everyone's here today.''
Some workers returning to the Wall Street area for the first time since the attacks were nervous.
``You sit next to the window and keep thinking, am I going to turn around and see a plane coming,'' said Jeannette Rosario, who works in information technology for an exchange clearing house.