Rising anthrax fears frustrate investors
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Associated Press
NEW YORK — A disappointing assessment of the economy and news that anthrax has been found on Capitol Hill squelched a surge of optimism on Wall Street today and gave the stock market its worst day in more than three weeks.
The 151-point drop in the Dow Jones industrials was the biggest slide in the blue chip index since the first week of trading after the Sept. 11 terrorist attacks. The Nasdaq composite and Standard & Poor's 500 indexes also had their largest declines since that turbulent week.
Federal Reserve Chairman Alan Greenspan's warning of a dip in productivity overshadowed a positive report on housing. And an announcement that the House will close tomorrow through Monday to test for anthrax quashed investors' enthusiasm about positive earnings from IBM and J.P. Morgan Chase.
The market's major indicators gave up solid early gains and retreated further as the day wore on.
"We were holding up on the profit front," said Ronald J. Hill, investment strategist for Brown Brothers Harriman & Co. "But those aren't real happy things for the market," particularly the latest anthrax findings, this time on Capitol Hill and the Manhattan office of New York Gov. George Pataki.
The Dow finished down 151.26 at 9,232.97, according to preliminary calculations, having relinquished an early 104-point advance.
The broader market followed a similar path, with the Nasdaq composite index down 75.73 at 1,646.34 and the Standard & Poor's 500 index down 20.45 at 1,077.09.
The downturn came as Greenspan told Congress it's too early to tell how much the economy was hurt by last month's terrorist attacks, although productivity is certain to suffer. Meanwhile, congressional leaders announced that more than 30 people had tested positive for anthrax at the Capitol.
The news increased uncertainty about when the weakened economy will recover and how it will fare as the U.S. retaliates for the terrorists attacks. Investors want to buy stocks, analysts said, but are still frustrated that Greenspan, along with most companies, can't predict when business will improve.
"If you thought there was no visibility before, there is really no visibility now," said Scott Bleier, chief investment strategist at Prime Charter Ltd.
Investors channeled their frustration into selling despite better-than-expected profits by IBM and J.P. Morgan Chase. But the two Dow industrials, which beat earnings expectations by a penny a share, hung onto gains with IBM rising $1.05 to $102.90, and J.P. Morgan advancing 66 cents to $34.60.
Among Wall Street's losers were companies that posted disappointing earnings. Data storage company EMC slid $2.24, or nearly 17 percent, to $11.21 after recording a loss of 12 cents a share, 7 cents wider than analysts had anticipated. Consumer products maker Kimberly-Clark fell $1.33 to $54.25.
Adverse to taking any chances, investors also sold off companies slated to report results tomorrow. Microsoft tumbled $2.42 to $56.03, and Sun Microsystems fell 81 cents to $8.80.
Sectors that stand to suffer the most from the terrorist attacks also registered sizable losses. Insurer American International Group declined 72 cents to $85.40.
UAL, the parent of United Airlines, fell $1.79 to $16.85, hurt by word from its chief executive that the carrier will go out of business sometime next year if it cannot soon stem losses that have worsened dramatically since Sept. 11. James Goodwin's comments came in a letter to employees, obtained yesterday as United continued to slash its schedule and work force to cope with the drastic decline in air travel caused by last month's terrorist attacks.
