Star-Bulletin news services
Terrorism fears fuel
stock market selloff
NEW YORK >> New fears of terrorism sent stock markets tumbling around the world yesterday and extended Wall Street's selloff into a second week.
U.S. investors reacted to market declines in Japan and Europe following reports that the al-Qaida terrorist network had claimed responsibility for weekend attacks in Turkey and named Japan and other U.S. allies as potential targets. But analysts said some of Wall Street's slide was due to normal profit taking.
The Dow Jones industrials fell more than 130 points before regaining ground late in the session. The declines came despite a better-than-expected report on business inventories and news that several companies were in merger talks, which often gives the market a boost.
"This market is vulnerable to good news, bad news or no news, so certainly the news of terrorist activity over the weekend and new threats from al-Qaida will provoke a reaction," said Alfred E. Goldman, chief market strategist at A.G. Edwards & Sons Inc. "But I do not see a serious downside from here; there's too much good going on."
The Dow ended the day down 57.85, or 0.6 percent, at 9,710.83. The Nasdaq composite index closed down 20.65, or 1.1 percent, at 1,909.61. The Standard & Poor's 500 index lost 6.72, or 0.6 percent, to close at 1,043.63.
Decliners outnumbered advancers by about 3 to 1 on the New York Stock Exchange. Consolidated volume was moderate, with 1.73 billion shares traded, compared to 1.69 billion shares in Friday's session.
The Russell 2000 index ended the day down 6.75, or 1.3 percent, at 526.21. The NYSE composite index fell 3.44, or 0.6 percent, to 556.72. The American Stock Exchange composite index lost 1.69, or 0.2 percent, to 1,071.48.
The two-year Treasury note gained 1/32 to 99 2 2/32, with its yield slipping 2 basis points to 1.78 percent. The 10-year note was unchanged at 100 1532, with its yield remaining at 4.19 percent.
A Commerce Department report showed America's businesses boosted their stockpiles of unsold goods in September for the first time in six months, a sign that companies may be feeling more confident about the economic recovery. Economists were expecting inventories to be flat in September.
Several companies were in merger talks yesterday, but that did little to raise the major indexes.
Travelers Property Casualty Corp. announced it would combine with The St. Paul Cos. Inc. in a $16.5 billion stock deal that will create the nation's second-largest insurer. St. Paul ended the day up 97 cents at $37.74. Travelers' class A shares were unchanged at $16.03, while class B shares fell 2 cents to $16.04.
Also yesterday, auto parts maker ArvinMeritor Inc. said it would increase its hostile takeover bid for rival Dana Corp. Dana said its board will review the offer. ArvinMeritor lost 12 cents to close at $17.94, while Dana dropped $1.41, or 8.5 percent, to close at $15.24.
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