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US stocks plummet, Dow posts largest point loss

The Dow Jones industrial average was ripped for a 679-point loss on Monday, its largest ever, as the market reopened after a four-session trading halt, to a world of heightened uncertainty created by air attacks that destroyed the World Trade Centre last week.

Despite a half-percentage point cut in interest rates by the Federal Reserve just before the opening and fleeting hopes of patriotic buying, support was kicked out from under the stocks. Pessimism about the massive terror attack's impact on the already wheezing the United States economy and worries about American military action ruled the day.

The Dow tumbled 679 points, or 7.07 per cent, to end at 8,920.70, according to the latest data, the lowest since December 1998. The previous largest point-loss was 617.78 points on April 14, 2000.

The Nasdaq composite index sank 116.09 points, or 6.85 per cent, to 1,579.28, the lowest close since October 1998. The benchmark Standard & Poor's 500 index was rocked for a 53.81-point loss, or 4.9 per cent, at 1,038.73, also the lowest since October 1998.

Amid record-breaking volume, airlines, hotels, and leisure-related stocks suffered the most intense selling, while the few winners included defence contractors like Raytheon and hand gun maker Sturm Ruger Co, as investors bet on a US retaliation and consumers becoming more security conscious.

"There's a lot of emotion in the market, as many people were affected by the tragedy," said Peter Coolidge, managing director of equity trading at Brean Murray & Co.

The uncertainty of how the US would respond to the attacks overhung the markets, he said, adding: "Markets don't like uncertainty."

Yet, even though stock prices suffered a historic drubbing, many on the Wall Street were stunned that the New York Stock Exchange, Nasdaq and the American Stock Exchange were back in business just six days after the monstrous destruction in lower Manhattan of the World Trade Centre left electricity, telecommunications and other support systems in ruins. Thousands remain missing in the mountains of rubble, just three blocks from the NYSE. It was the largest cessation of trade since the Great Depression.

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