Dow plummets as markets reopen

AP Business WriterNEW YORK (AP) -- Scared investors sent stocks plummeting as Wall Street resumed trading Monday for the first time since last week's terrorist attacks. The resumption ended the stock market's longest shutdown since the Depression.

The Dow's drop of 721.56 by midafternoon to 8883.95, or 7.5 percent, was its biggest intraday decline. It topped the 721.32 decline on April 14, 2000. The day also marked the Dow Jones industrial average's first tumble below 9,000 since Dec. 3, 1998, when it was 8,879.68.

Heavy trading volume topped 1 billion shares at midday. Airline, insurance and entertainment stocks were among the hardest hit.

The selling was expected in a market already fragile because of poor corporate profits and outlooks. Fears that the nation is headed toward war, plus the attacks' devastating effects on the airline industry, added to the gloom.

But an hour before trading began, the Federal Reserve cut interest rates by a half-point -- the eighth rate cut so far this year.

The market fluctuated as expected throughout the day, with the Dow skidding 629 points in early trading, then regaining about 170 points before turning lower again.

Business leaders had urged investors to treat the market's reopening as a buying opportunity instead of a reason to sell. "I won't be selling anything," one of the country's best-known investors, Warren Buffett, said Sunday on CBS's "60 Minutes."

However, early optimism wasn't enough to help the market.

"To buy stocks you need some kind of clarity and confidence, and right now you've got neither," said Bill Barker, investment consultant at Dain Rauscher in Dallas. "The buying public is sitting on its hands."

The Dow fell in 50- and 100-point bursts as its 30 components opened for trading. When American Express began trading, the last Dow component to open, the index's loss crossed the 600-point mark; by early afternoon, American Express was down $5.28 to $29.73.

The Dow was also well below its lowest close of the year -- 9,389.48 on March 22. Nearly all of its 30 components posted big losses.

The broader market also suffered with the Nasdaq down 110, or 6.5 percent, to 1,584 by midafternoon, a level not seen since October 1998. The broader Standard & Poor's 500 index was down 44.27, or 4.1 percent, to 1,048.27.

The Dow's slide passed its largest one-day loss, a 617-point fall in April 2000.

The stocks of major airlines and travel-related companies fell sharply. Continental, which announced 12,000 layoffs this weekend, was down 48 percent by midday. AMR Corp., the parent of American Airlines, was down 39 percent; UAL Corp., the parent of United, was down 39 percent. Both airlines lost two jetliners in the Sept. 11 hijackings.

Major airlines have lost some $1 billion in the past week as a result of reduced demand from fearful travelers, the two-day aviation shutdown after the attacks, and higher expenses from tough new security measures.

Before trading began just five blocks from the wreckage of the World Trade Center towers, the New York Stock Exchange observed two minutes of silence followed by the singing of "God Bless America."

The opening bell was rung by members of the police and fire departments along with representatives of other agencies involved in the rescue and recovery efforts at the disaster site.

"Let us celebrate these wonderful men and women," said NYSE Chairman Richard A. Grasso, who was surrounded by federal, state and local officials on a balcony overlooking the exchange floor.

Outside, a huge American flag was draped across the NYSE's famed columns.