New York Stock Exchange Reopens to Sharp Losses
The Dow Jones industrial average closed with its biggest point drop ever, 684 points, to 8,920. The decline was a loss of more than 7 percent. The technology-heavy Nasdaq Composity Index fell 115 points to 1,579, a loss of almost 7 percent. Both indicators were at their lowest points since late 1998.
The markets had been closed for four business days after terrorist attacks leveled the World Trade Center and damaged the Pentagon, killing and injuring thousands of people.
Airlines were hardest hit by the jittery market, as companies announced cuts in personnel and losses after flights were grounded and demand fell. Security concerns and measures are expected to hurt the airline industry as well.
In response to the expected losses, President Bush ordered a comprehensive assistance package for the U.S. airline industry.
“The president believes that we should develop a package to help the airlines emerge from the difficulties — a comprehensive package,” White House spokeswoman Claire Buchan said.
Before trading resumed this morning, the NYSE observed two minutes of silence in memory of those people killed in the terrorist attacks. A Marine officer then sang “God Bless America” and members of New York’s fire and police departments helped ring the bell to open today’s trading session.
Mayor Giuliani, Governor Pataki and Senators Clinton and Shulmer were present, urging Americans to stand firm and to help New York rebuild.
Despite the magnitude of the decline, market analysts said the sell-off was not as severe as many had feared. They point out that prices were already under pressure because of weak corporate profits and the slumping economy.
Before trading began, the Federal Reserve cut short-term interest rates for the eighth time this year, reducing its target for its benchmark federal funds rate on overnight loans between banks from 3.5 to 3 percent, its lowest level in nine years.
The Fed made its move after an emergency meeting of its policy makers early this morning, and it said in a statement that it would continue to pump money into the financial system “until more normal market functioning is restored.”