Stocks Fall on More Economic Worries
Stocks suffered a broad decline Wednesday amid ongoing worries about the economy and mounting fears about anthrax attacks, raising concerns that the recent rebound is reversing.
Key indexes posted their biggest losses since the market’s plunge in the week that trading resumed after the Sept. 11 terrorist attacks.
The Nasdaq composite slid 75.73 points, or 4.4%, to 1,646.34 in active trading. Selling accelerated in the final half hour. The Dow industrials gave up 151.26 points, or 1.6%, to 9,232.97.
Nasdaq’s drop was its biggest since it slumped 6.8% on Sept. 17, the first day of trading after the attacks. The Dow’s loss was its biggest since Sept. 21.
Losers topped winners by 22 to 14 on Nasdaq and by 20 to 11 on the New York Stock Exchange. There was little movement in other key markets. Treasury bond yields were mostly flat. Gold prices inched up.
The decision to temporarily close the U.S. Capitol because of an anthrax outbreak “suggests that the terrorists can interrupt our political activity significantly and therefore can disrupt our business activity significantly,” Robert Robbins, investment strategist at SunTrust Robinson Humphrey in Atlanta, told Bloomberg News.
Some investors also might have been concerned by Federal Reserve Chairman Alan Greenspan’s testimony to a joint congressional committee. He said it remains difficult to judge the effect of the attacks and what repercussions are still to come.
Meanwhile, the flood of third-quarter earnings reports continued, benefiting some stocks while hurting others.
Some analysts said today’s trading could be critical in determining the market’s next move: Another sell-off could convince more investors that the gains of recent weeks will be fleeting and that it would be smart to take profits. A rally, however, could bolster the case that stocks have seen their lows.
Among Wednesday’s highlights:
* Airline stocks were sharply lower on renewed concerns about the industry’s future. UAL, parent of United, dropped $1.79 to $16.85, a new multiyear low. UAL’s chief executive Tuesday told employees that the carrier will go out of business next year if it cannot stem losses.
AMR, parent of American, slid $1.02 to $19.28, and Alaska Air lost $1.53 to $20.08.
* Tech stocks leading that sector lower included EMC, which sank $2.24 to $11.21 after the company reported a third-quarter loss and warned of more losses ahead; Qlogic, down $4.04 to $33.80; Oracle, off $1.28 to $13.66; I2 Technlogies, down $1.40 to $4.29; and EBay, which lost $4.51 to $57.09.
Also, Veritas Software dropped $3.17 to $26.26 even though the firm said it was “comfortable” with analysts’ fourth-quarter earnings and sales estimates.
But IBM gained $1.05 to $102.90 after the company sounded relatively upbeat Tuesday about its 2002 outlook. FileNet surged $3.32 to $13.37 after posting a smaller-than-expected third-quarter loss.
* Most defense stocks sold off after General Dynamics gave a forecast for 2001 earnings that was below some analysts’ estimates. That disappointed some investors who had expected the defense sector to enjoy an immediate windfall from higher U.S. military spending.
General Dynamics slid $7.35 to $83.75, Northrop Grumman sank $2.80 to $102.20 and Lockheed Martin fell $1.36 to $46.49.
* Major savings and loan stocks tumbled in the wake of earnings reports that disappointed some investors. Washington Mutual fell $4.09 to $33.01, and Golden State Bancorp lost $1.23 to $25.46.
* Eli Lilly dropped $4 to $75 after a U.S. regulatory panel deadlocked on whether to support the drug maker’s Xigris treatment for sepsis, a life-threatening illness.
Market Roundup: C7, C8
