Market selloff
resumes

The Dow plunges 383 while the
S&P 500 falls below 1,000
for the 1st time in 3 years

---

By Amy Baldwin
Associated Press

NEW YORK >> Wall Street's losses widened greatly today -- its third steep decline in four sessions -- as Federal Reserve Chairman Alan Greenspan confirmed what the stock market already knew and feared: Last week's terrorist attacks have already produced a significant drop in economic activity, and promise to do more damage.

The Dow Jones industrial average fell more than 380 points, bringing its loss so far this week to 1,229 points or nearly 13 percent and putting the blue-chip index in line for its biggest one-week point drop.

"It's roller-coastering down," said Matt Brown, head of equity management at Wilmington Trust.

The intense selling was expected after a turbulent session yesterday, when the Dow fell more than 400 points before recovering to a loss of 144. The market's anxiety reappeared today as Greenspan told Congress the terrorist attacks had disrupted the business activity in a number of ways, including a drop in consumer spending and travel and last week's four-day shutdown of the stock market. But the Fed chairman also said, "I am confident that we will recover and prosper as we have in the past."

The Dow fell 382.92, or 4.4 percent, at 8,376.21. Unless the blue chips rally substantially tomorrow, they are likely to have their biggest one-week point drop, eclipsing the 821.21 they fell in the week ending March 16. The Dow is below 8,400 for the first time since October 1998.

The broader market was also down, with the Nasdaq composite index falling 56.87, or 3.7 percent, to 1,470.93 and the Standard & Poor's 500 index off 31.56, or 3.1 percent, at 984.54.

This is the first time the S&P 500, considered the market's best indicator, has closed below 1,000 since October 1998.

Decliners outnumbered advancers 5 to 1 on the New York Stock Exchange, with 2,644 down, 548 up and 156 unchanged. Volume was heavy with 1.91 billion shares being traded vs. 2.15 billion yesterday. The NYSE composite index fell 15.22 to 514.16, the American Stock Exchange composite index tumbled 25.00 to 796.06 and the Russell 2000 index fell 15.55 to 387.65.

The Treasury's 2-year note fell 1/8 to 101-12/32; its yield rose 7 basis points to 2.88 percent. The 10-year note fell 12/32 to 102-1/32; its yield rose 5 basis points to 4.74 percent. The 30-year bond dropped 1 to 96-14/32; its yield rose 7 basis points to 5.62 percent.

"The economy was in bad shape before this event, and this event just magnified everything by thousands," said Gary Kaltbaum, market technician for Investors' Edge Partners, of last week's terrorist attacks.

Uncertainty weighed heavy on Wall Street, where analysts and investors wondered just how much and for how long the economy will suffer as a result of the Sept. 11 attacks, and anxiously awaited to see how the Bush administration will retaliate.

"We just don't know the answers," said Ricky Harrington, a technical analyst for Wachovia Securities.

Such sentiment was echoed throughout the market. Jon Brorson, director of equities at Northern Trust, said: "We just don't know, and that's the thing."

And, Kaltbaum said: "Nobody has a clue what tomorrow morning will bring. And, when there is so much uncertainty, people don't want their money at risk."

The market is expected to remain quite vulnerable as companies announce layoffs and profit warnings linked to the attacks in which hijacked airliners leveled the World Trade Center and destroyed part of the Pentagon.

Signs of economic fallout have already surfaced as all U.S. airlines have reduced their flight schedules and some have cut thousands of jobs, and as insurance companies have warned that massive payouts will hamper the industry for quite a while.

Likewise, financial companies have warned that they will suffer as consumers and investors spend, borrow and invest less. Retailers and those in the entertainment industry also expect a drop in business.

In keeping with investors' fears that practically all businesses will be hurt, today's selling was again spread across an array of sectors.

Boeing, which has announced it will cut as many as 30,000 jobs, fell $2.85 to $29.76. Implementing the first of its 12,000 layoffs today, Continental Airlines dropped $3.56 to $13.90.

Insurer American International Group, which said last week it expects its pretax losses from the attack to total $500 million, fell 60 cents to $68.90. Banker Citigroup declined $2.09 to $36.36, while brokerage house Merrill Lynch tumbled $2.49 to $36.01.

Retailer Target fell $1.36 to $26.90, while cruise ship operator Carnival slipped $1.20 at $18.05.

Analysts said investors receiving margin calls -- a demand that they repay money borrowed to buy stocks earlier -- and the expiration of index futures and options tomorrow may be contributing to the heavy selling.