Dow plummets as markets reopen

Dow closes down 681 points as market reopens for first time since terrorist attacks

September 17, 2001

By Lisa Singhania
AP Business Writer

NEW YORK – Skittish investors sent stocks plummeting Monday on Wall Street’s first trading day since last week’s terrorist attacks. The Dow suffered its biggest one-day point drop and closed below 9,000 for the first time in more than 2½ years.

The resumption ended the stock market’s longest shutdown since the Depression.

The Dow ended the day down about 681 points at 8,924, or a fall of 7 percent, according to preliminary calculations. Its previous record for a one-day drop was 617.78, set April 14, 2000.

The heavy selling was widely expected in a market already fragile because of poor corporate profits and outlooks. And since the attacks, which closed the nation’s stock market for four days, the major airlines have announced cutbacks and reduced schedules, adding to investors’ nervousness.

But the Federal Reserve, hoping to boost the economy and the market’s confidence, cut interest rates by a half-point an hour before trading began. It was the eighth rate cut so far this year.

Financial leaders had called on investors to treat the market’s reopening as a buying opportunity instead of a reason to sell.

New York Stock Exchange chairman Richard A. Grasso was sanguine about the volatility after the opening bell: "Today’s market is not important. It’s the market a year from now, two years from now."

Many investors didn’t seem to be unnerved by the market’s drop.

"In fact, the reaction has been just the opposite," said Ronald Loftus, a broker in Springfield, Mass. "Some people are looking to buy primarily out of patriotism and to show their support. They are saying it’s something they can do."

The Dow fell in 50- and 100-point bursts as its 30 components opened for trading. When American Express, the last Dow component to open, began trading the Dow’s loss surpassed 600 points and the index fell below 9,000, dropping to 8,976. The blue chips last closed under 9,000 on Dec. 3, 1988, when they fell to 8,879.68.

The market fluctuated as expected throughout the day, with the Dow recovering to a loss of about 460 points before turning lower again in the afternoon. Shortly before 3 p.m., the index was off 721.56, reaching its biggest-ever intraday decline, topping the 721.32 it fell on April 14, 2000.

The Nasdaq composite index fell 115 points and the broader Standard & Poor’s 500 index was down 53.