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Archive for Saturday, September 22, 2001

Dow suffers worst weekly drop

September 22, 2001

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— Wall Street, consumed by political and economic uncertainty, sold stocks sharply lower for the fourth time in five sessions Friday, giving the Dow industrial index its biggest one-week point decline ever.

The stock market's best-known indicator fell more than 140 points for the day and 1,369.70 for the week.

Americans clearly were in no mood to take chances in the first week of trading after terrorist attacks on the World Trade Center and the Pentagon.

Markets were closed for four days after the attacks, leaving this week's trading which sent stocks to their lowest levels in almost three years to represent Wall Street's response to the assaults.

Friday's trading was volatile amid worries about how the United States would retaliate for the attacks and how much the economy would suffer in the months ahead. Technical factors that can make prices fluctuate in the best of times also affected activity.

The Dow had several big swings falling 313 points in the opening minutes of trading, surging to a gain of more than 50 points an hour later and then falling back again.

"This is an extraordinarily emotion-filled stock market environment," said Hugh Johnson, chief investment officer at First Albany. "Investors are scrambling to defend their nest eggs."

The Dow Jones Industrial Average fell 140.40 to 8,235.81, a loss of 1.7 percent. The Dow's drop for the week amounted to 14.26 percent; that is the fifth-largest percentage decline and the biggest since May 1940, when the Dow traded at 122, less than the Friday's decline alone.

The Nasdaq composite index was down 47.74 or 3.3 percent at 1,423.19, while the broader Standard & Poor's 500 index fell 18.74 or 1.9 percent to 965.80.

Volume was extremely heavy Friday at more than 2 billion shares. One of out of every four stocks that traded on the NYSE posted a new 52-week low.

While the market historically falls in the first few weeks or months following catastrophes and other conflicts such as the Persian Gulf War in 1991 and then heads higher during the long term, analysts said such history was no comfort to investors right now.

"They are saying, 'Just get me out at all cost. I can't stand anymore,"' Johnson said.

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