NEW YORK >> Wall Street found some stability today as investors curtailed their selling and did some buying, but ran into late resistance in its attempt to rebound from yesterday's shockwave that sent blue-chip stocks tumbling to their biggest one-day point drop.
Wall Street levels off
Dow loses early gains to end its
second straight session below the 9,000 mark
By Amy Baldwin
The market gave up earlier gains that had sent the Dow back above the 9,000 level, as investors turned their attention late in the day to the political uncertainty following last week's terrorist attacks.
The Dow fell 17.30 to 8,903.40.
However, the downturn in the Dow paled in comparison with the decline yesterday -- the first day of trading since hijacked jetliners smashed into the World Trade Center and the Pentagon -- when the blue chips lost a record 684.81 points and fell below 9,000 for the first time since December 1998.
The broader market also gave back its earlier gains as the Nasdaq composite index fell 24.47 to 1,555.08 and the Standard & Poor's 500 index declined 6.01 to 1,032.76.
Declining issues outnumbered advancers nearly 3 to 2 on the New York Stock Exchange, with 1,224 falling, 1,937 rising and 180 unchanged. Volume came to 1.93 billion shares.
The Russell 2000 index, which measures the performance of smaller company stocks, fell 6.01 to 411.66. The NYSE Composite Index fell 3.63 to 538.36. The American Stock Exchange Composite Index fell 15.36 to 837.52.
Major indexes aside, a sign of the market's attempt to stabilize was apparent in trading volume, which returned to more moderate levels after a record-breaking session yesterday when 2.33 billion shares were traded at the New York Stock Exchange.
Still, analysts expect the market to be weak and vulnerable throughout this week as skittish investors rush to adjust their portfolios. Investors now have more to be nervous about -- namely national security -- than the weak economy, which had been pulling stocks lower for weeks.
"What is holding it down are the new questions political uncertainties," said Joseph V. Battipaglia, chief investment strategist at Gruntal & Co.
Battipaglia expects the market to move in a range of 5 percent in either direction until it becomes clearer what form the war on terrorism pledged by President Bush will take.
Over longer term, however, analysts say stock prices will recover. In fact, they say massive selling like yesterday's might be what is needed to finally form the market bottom that investors have been longing for.
"Weak now, stronger later. There is no question there," said Jon Brorson, director of Northern Trust in Chicago. "The question is how much weakness do we get and when does the turn (upward) come."
Today's losers included sectors, such as travel services and insurance, that were weak Monday. Online travel agent Expedia dropped $4.36 to $19.64.
Insurers again traded lower as the industry faces big losses following last week's attacks. American International Group fell 95 cents to $70.05.
Financial companies suffered as Wall Street expects that investors and consumers will invest, spend and borrow less amid greater uncertainty about the economy. Dow industrial American Express, which issued a third-quarter profit warning late yesterday, skidded $3.14 to $27.11.
But winners included airlines, which endured double-digit dollar losses yesterday. AMR, the parent of American Airlines, gained $2 to $20, and UAL, the parent of United Airlines, rose $1.49 to $18.99.
The boost to airlines also came as Wall Street expected the government to announce relief for the industry. Transportation Secretary Norman Y. Mineta said the Bush administration was preparing an aid package, noting that the attacks are costing airlines $250 million to $300 million a day. Since the attacks, all major U.S. airlines have announced reduced flight schedules, anticipating that a fear of flying will curb demand.
Other winners included technology companies, which analysts said could benefit as businesses, particularly in the financial sector, spend more money to revamp offices in the wake of the attacks.
Treasury notes fell yesterday. The price of the 10-year Treasury bond fell 21/32 to 102 10/32, while its yield rose 8 basis points to 4.703. The price of the 30-year bond fell 1 21/32 to 97 20/32; its yield rose 12 basis points to 5.538.