Markets Recover After Plane Shock
Stocks were mixed Thursday as investors quickly shook off a midday drop caused by news of a plane crashing into a skyscraper in Milan, Italy, but couldn’t get over a weak financial forecast from telecom bellwether Nokia.
The market pared losses after Italian officials called the crash of a small plane into Milan’s tallest building an apparent accident. Reports of the crash, which at first appeared similar to the suicide attacks that leveled the World Trade Center on Sept. 11, had sparked a short, sharp market sell-off.
“It was eerie for people to see another news report very similar to what happened here,” said Rick Meckler, head of LibertyView Capital, located in New Jersey across the Hudson River from the World Trade site. “It was a little bit too close in terms of news.”
At the close, the Dow Jones industrial average was down 15.50 points, or 0.2%, to 10,205.28, after sinking more than 1.6% in the minutes after the plane crash. The Nasdaq composite closed down 8.24 points, or 0.5%, at 1,802.43, after tumbling almost 1.8%.
Decliners and advancers were even on the New York Stock Exchange, and winners outnumbered losers 9 to 8 on Nasdaq in moderate trading.
Jitters fed by the plane crash hit the owners of American and United, the two largest U.S. airlines. American parent AMR fell 79 cents to $22.86, and United parent UAL lost 55 cents to $14.84. The S&P; airline index closed off 2.6% after diving more than 5% immediately after the Milan news.
In other markets, Treasury bond yields eased and gold futures prices edged higher.
The bigger weight on the stock market late in the day was concern over disappointing earnings reports, analysts said. Nokia, the No. 1 maker of cell phones, fell $2.53 to $18.10 after cutting its estimates of industry growth this year.
Weakness in such big-name shares as Colgate-Palmolive, which fell $3.80 to $53.95 on concerns about sales growth, and Honeywell, which sank $2.16 to $38.30 on fears about asbestos liability, hurt sentiment.
Among Thursday’s highlights:
* The S&P; semiconductor equipment index sank 3.1%. KLA- Tencor lost $3.05 to $65.61 after giving a weaker-than-expected forecast for orders. The news dashed some of the recent optimism about a turnaround in the chip sector.
* ExpressJet Holdings was unchanged at $16 as the biggest first-time stock offering by a U.S. airline since at least 1990 had an unimpressive debut. Investors are worried about the prospects for Continental Airlines, which still owns a controlling stake in ExpressJet. Continental fell $1.41 to $28.20. JetBlue Airways fell 90 cents to $44.20. Shares of JetBlue soared 66% in their first day of trading last week--the best performance by an IPO in almost a year.
* Trimeris, a small biotech firm, soared $11.25, or nearly 29%, to $50.50 on positive results from pivotal human tests on its experimental AIDS drug, which could help patients resistant to currently available treatments. Trimeris is co-developing the drug, dubbed T-20, along with the U.S. subsidiary of Swiss health-care giant Roche, which rose 60 cents to $76.40 in New York trading.
* Adelphia Communications eased 19 cents to $7.06. After regular trading ended the troubled cable TV firm said Nasdaq may delist its shares because of the company’s delay in filing financial documents.
* McDonald’s rose $1.46 to $28.62 after the restaurant giant said it expected higher sales in the U.S. and Europe this year.
Market Roundup, C5-6
