Stocks wing wildly, Dow down by 170 points at midday

  • Amy Baldwin / Associated Press
  • Thursday, September 20, 2001 9:00pm
  • Business

By Amy Baldwin

Associated Press

NEW YORK – Stocks fluctuated in turbulent trading Friday as Wall Street contended with political and economic uncertainty as well as technical factors that can make the market volatile in the best of times.

The Dow Jones industrials plunged 313 points in the opening minutes of trading, then surged to a gain of more than 50 points an hour later before it fell back to a loss of more than 170. The Dow has already declined more 1,229 points this week, well ahead of the record 821.21-point decline in the week ending March 16.

The market was clearly uneasy as it waited for the United States’ anticipated retaliation for last week’s terrorist attacks.

“This is an extraordinarily emotion-filled stock market environment,” said Hugh Johnson, chief investment officer at First Albany. “Investors are scrambling to defend their nest eggs.”

In heavy trading Friday afternoon, the Dow was down 171.81 at 8,204.40, a loss of 2.1 percent.

The Nasdaq composite index was down 54.09 or 3.7 percent at 1,416.84, while the broader Standard &Poor’s 500 index fell 22.68 or 2.3 percent to 961.86.

While the market historically falls in the first few weeks or months following catastrophes and other conflicts, such as the Persian Gulf war in 1991, and then heads higher over the long term, analysts said that is no comfort to investors right now.

“They are saying, ‘Just get me out at all cost. I can’t stand anymore,’ ” Johnson said. “I try to give them perspective by looking at other crises. But even when you give them perspective, they dismiss it, because they are so scared.”

Friday’s volatility also was due to what’s known as a triple witching session, the quarterly expiration of index futures and index and stock options.

Many of the expirations came at the opening of trading, and investors chose to sell rather than roll the contracts forward amid the political and economic turbulence. Another round of expirations was to come at the close of trading.

Among Friday’s losers were Northwest Airlines, falling 71 cents to $10.30 after announcing 10,000 layoffs. Boeing, which is slashing 30,000 jobs, was down $1.26 at $28.50.

Stocks also fell overseas amid uneasiness about U.S. plans to retaliate against last week’s terrorist attacks. In London, the FT-SE index was off 1.9 percent; Frankfurt’s DAX index fell nearly 1.6 percent, and Paris’s CAC-40 declined 2.4 percent. Japan’s Nikkei stock average finished the day down 2.4 percent.

Copyright ©2001 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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