Share this article

print logo

STILL SUFFERING <br> 'NO PLACE TO HIDE' AS DOW DROPS MORE THAN 250

News of thousands of job cuts at Boeing and other companies sent stocks tumbling again today. Investors grew increasingly concerned that last week's terrorist attacks have hurt the already fragile economy further.

The heavy selling ended a one-day reprieve for Wall Steet, which had steadied Tuesday after a severe drop Monday.

At 1 p.m., the Dow Jones industrials were down 226.27 at 8,677.13, having fallen as much as 289 points. The Nasdaq composite index declined 56.68 to 1,498.40, while the Standard & Poor's 500 index was off 23.52 at 1,009.22.

The selling, while not entirely unexpected, was a blow to hopes that the market was stabilizing after Monday's huge sell-off, in which the Dow fell a record 684 points and all the major indexes reached levels not seen since 1998. Stocks had dropped only slightly Tuesday, with the Dow slipping 17.

But Boeing's announcement late Tuesday of as many as 30,000 job cuts, as well as predictions of tough times ahead by Eastman Kodak and others, renewed the fears of investors already skittish about the market.

Wall Street had been pushing the market lower all year on worries about when business will improve and, prior to last week's attack, many analysts had predicted that the worst of the selling might be over soon. But the assaults on the World Trade Center and Pentagon negated those forecasts and raised the possibility the situation may be deteoriorating.

"It's an extremely broad-based decline," said Tom Schrader, head of listed trading at Legg Mason Wood Walker in Baltimore. Schrader said that even health-care stocks, which investors often turn to because of their stable profits even during slowdown, have declined today.

"There is no place to hide," he said. "All of the classic defensive areas are going down."

Eastman Kodak slid $4.63, or 11 percent, to $35.20 after it lowered third-quarter expectations and said more job cuts are inevitable.

Boeing fell 37 cents to $32.77 on word of as many as 30,000 job cuts due to an anticipated slowdown in air travel following the attacks.

General Electric fell $1.80 to $32.05 and is now down 19 percent since the attack. Investors are assessing the damage the world's largest company will have to its aircraft engine, insurance, airplane leasing and credit card businesses.

GE Chairman Jeffrey Immelt is scheduled to address shareholders and analysts at a meeting Friday.

Exxon Mobil lost $1.50 to $37.98. Other oil companies also fell after Europe's largest, Royal Dutch/Shell Group cut its target for annual growth in oil and gas output to 3 percent. Royal Dutch's U.S. shares, which are in the S&P 500, fell $1.89 to $48.79.

While Royal Dutch said the change was due to slowing demand before the terrorist assault, analysts have said slower economy growth in the wake of the attack also may slow oil and gas consumption.

Among technology stocks, Microsoft fell $1.54 to $52.78, Intel dropped $1.21 to $22.26, and Oracle lost 58 cents to $10.80.

Charles Schwab, the biggest discount stock broker, fell 57 cents to $9.44. Schwab said profit in the quarter ending Sept. 30 will be less than expected as financial firms begin to tally the costs of the four-day trading halt.

Other brokers also declined. Merrill Lynch fell $2.91 to $36.90, Lehman Brothers Holdings slid $2.86 to $49.53, and Ameritrade Holding lost 56 cents to $3.91.

Schwab has fallen 20 percent since trading resumed, Merrill 21 percent, Lehman 20 percent and Ameritrade 24 percent.

Among the few winners today: telecommunications firm Verizon, which rose $2 to $53.70.

Analysts also attributed the losses to technical aspects of trading. They said investors who borrowed money to buy earlier, may have been forced to sell some of their stocks to pay back those loans in what are known as margin calls.

Analysts also noted that the expiration of stock futures and options Friday, a quarterly occurrence called triple witching, might be contributing to the downturn.

Meanwhile, the Commerce Department reported today that the U.S. trade deficit narrowed slightly to $28.8 billion in July as a big drop in imports of cars, oil and other foreign products offset the biggest fall in U.S. exports on record.

There are no comments - be the first to comment