six days later, markets reopen

Six days later, markets reopen; early prices lower despite Fed interest-rate cut

By LISA SINGHANIA

AP Business WriterNEW YORK (AP) -- Nervous investors sent stocks falling sharply in the opening minutes of trading Monday, the market's first day back since last week's terrorist attack.

The decline came despite a surprise announcement by the Federal Reserve to cut its key interest rate to try to keep the economy from plunging into a recession.

Within minutes of the resumption of trading, the Dow Jones industrial average was down more than 240 points and the Nasdaq was down 100 points.

Before trading resumed, the New York Stock Exchange observed two minutes of silence in memory of the dead and listened to a Marine officer sing "God Bless America." Then members of the police, fire and rescue crew rang the opening bell.

The initial selling was expected in a market already fragile because of poor corporate profits. And now, fears that the nation is headed toward war and the devastating effects of the attacks on the airline industry and the rest of the economy added to the selloff.

But the Fed, hoping to boost the economy and the market's confidence, cut interest rates by a half-point -- the eighth rate cut so far this year.

"Let us celebrate these wonderful men and women," said NYSE Chairman Richard A. Grasso, surrounded on a balcony overlooking the exchange floor by members of the police and fire departments and representatives of other agencies involved in the rescue and recovery at the World Trade Center disaster site a few blocks away.

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

Monday's trading ended a four-day shutdown of the nation's stock markets. It was the longest NYSE closure since March 1933 when the government shuttered the exchange for more than a week for a banking holiday during the Depression.

Analysts said investors' reactions will be as important as the success of the repairs made to get the communications and other infrastructure destroyed when two hijacked planes destroyed the World Trade Center.

One of the country's best-known investors, Warren Buffett, said Sunday on the CBS program "60 Minutes," "I won't be selling anything."

"If prices would fall significantly, there's some things I might buy," Buffett said. "But ... it's not a different country economically than it was a week ago."

In the morning, brokers, traders, investment bankers and other Wall Streeters returned to the devastated financial district, many of them carrying American flags. Police checked IDs. On street corners, National Guardsmen stood with rifles.

Nick Matera of Staten Island arrived at the NYSE in the blue jacket of a trading floor worker. He called the opening "symbolic more than anything else" and noted the changed environment, saying: "It's an odd feeling with the smoke and all."

Businesses spent the weekend cleaning up the debris littering the financial district. Utility workers laid and rewired thousands of cables to restore telecommunications and power, while the city prepared the subway system for its first real use in nearly a week.

But challenges remain.

Although the larger investment houses have relocated their operations in backup locations outside the financial district, others struggled to get their offices up and running.

"They're opening the exchange so that every individual investor can participate, but we can't because we don't have connectivity," said Ray Velez, a manager at a day-trading firm near the NYSE that lacks access to the Internet and other data services needed to compete in the markets.

A variety of steps were being taken to smooth the resumption of trading.

The Securities and Exchange Commission announced a series of rules that, among other things, make it easier for firms to buy back their own stock.

Grasso said there would be no constraints on trading, with limit orders being processed as well as short sales, those in which traders make money by betting the market goes down. He also said the NYSE should be able to handle any volume of trading, noting that the exchange has the capacity for five times the current average daily volume of about 1.2 billion shares.