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Stocks plunge on first day of trading since attacks

Headline Photo
Associated Press

Police wait outside the flag-draped New York Stock Exchange yesterday morning. The stock exchange resumed business yesterday for the first time since the terrorist attacks at the World Trade Center last Tuesday.

By Associated Press

Tuesday September 18, 2001

NEW YORK -Nervous investors sent stocks reeling yesterday on Wall Street's first day of trading since the 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 of trading - on a floor still smelling heavily of acrid smoke - ended the stock market's longest shutdown since the Depression.

The Dow ended the day down 684.81 points at 8,920.70, according to preliminary calculations. Its previous record for a one-day drop was 617.78, set April 14, 2000.

The Nasdaq fell 115.83 points to 1,579.55, and the broader Standard & Poor's 500 index was down 53.77 at 1,038.77.

Still, in percentage terms the drop in the Dow was only a third as big as the 1987 crash. Both the Dow and the Nasdaq were off about 7 percent. By comparison, the Dow dropped more than 22 percent when it lost 508 points in the crash of 1987.

Even before last week, the market had been hurting because of the sluggish economy. But the terrorist attacks dealt a punishing blow, particularly to airlines, which have been forced to cut back service and lay off tens of thousands of employees because a fear of flying has reduced bookings.

The Federal Reserve, hoping to boost the economy and the market's confidence, cut interest rates by a half-point just an hour before trading began. It was the eighth rate cut so far this year.

Despite the still-smoking ruins in lower Manhattan, it appeared the usual 3,000 traders and other employees made it to the floor of the New York Stock Exchange.

Outside, National Guardsmen in camouflage patrolled the streets with rifles, and Wall Street professionals had to pass through police checkpoints.

Harvey Grossman did not mind being questioned at two checkpoints. "It's for my safety," said Grossman, a state Insurance Department employee.

Dust still caked storefronts. Some people wore masks to protect them from the grit. And while some executives still wore gray suits, the attacks had an effect on the Wall Street dress code.

"I told my people to wear jeans because I didn't know what the streets would be like," said James Gallagher, an executive at the Dresdner, Kleinwort, Wasserstein brokerage. He wore dungarees and a sports jacket.

Financial leaders had appealed to investors' patriotism to try to forestall a big sell-off.

Volume on the NYSE reached a record 2.33 billion shares, nearly double the 1.24 billion traded the previous Monday, the day before the terror attacks. The previous record was 2.13 billion, set Jan. 4.

Airlines, insurance and entertainment were among the hardest-hit stocks.

AMR Corp., the parent of American, plummeted $11.62, or 39 percent, to $18.08. UAL Corp., which owns United, dropped $12.90, or 42 percent, to $17.92. American International Group, an insurance company, fell $3.26 to $71.

Disney, which is expected to suffer along with other entertainment stocks because the attack has made some people afraid to leave home, fell $4.33 to $19.25.

There were some winners, chiefly in defense and security, which could see increased government spending. Defense contractor Lockheed Martin rose $5.63 to $43.95.

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.

Shortly before 3 p.m., the index was off 721.56, its lowest point of the day.

The American Stock Exchange, forced out of its home by damage from the attack, operated out of a few posts in one area of the NYSE.

Before trading started, the NYSE observed two minutes of silence followed by a Marine officer's 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 columned front. Church bells pealed and the national anthem blared from loudspeakers on a bank building.

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.


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