By Amy Baldwin
Associated Press
NEW YORK — The stock market greeted news of U.S. military attacks on the Taliban in Afghanistan quietly Monday, with prices falling as investors tried to discern what the U.S. retaliation would mean for the country and the economy.
Analysts said investors locked in profits from last week’s rally as they worried that the United States will suffer more terrorism after American and British forces on Monday continued missile attacks begun Sunday in Afghanistan, retaliating for the Sept. 11 terrorist assaults.
In late afternoon trading Monday, the Dow Jones industrial average was down 86.91 at 9,032.86, having risen 272.21, or 3.1 percent, last week.
The broader market was lower. The Nasdaq composite index slipped 13.86 to 1,591.44. Last week, the tech-focused index rose 106.50, or 7.1 percent. The Nasdaq has posted wins for the last four sessions, a streak not seen since June 26-29.
The Standard &Poor’s 500 index, Wall Street’s widest measure, was down 13.08 at 1,058.30.
Monday’s mild pullback was expected given the political uncertainty and last week’s rally, spurred by the Federal Reserve’s ninth interest rate cut of the year and a push by President Bush for an economic stimulus package worth $60 billion.
"We are probably in good shape for a decline anyway," said Richard A. Dickson, technical analyst for Hilliard Lyons in Louisville, Ky.
But analysts were encouraged that the selloff wasn’t greater.
"The market is attempting to stabilize," said Alan Ackerman, executive vice president of Fahnestock &Co.
Trading volume was lighter than normal, which could be attributed partly to traders’ caution, as well as the Columbus Day federal holiday. There also were no major third-quarter earnings reports scheduled to be released.
"This is a combination of things. There is some concern on the part of some investors about the retaliation. There is also some ordinary profit taking from the extraordinary strong run," said Bill Barker, investment strategy consultant for Dain Rauscher in Dallas, who also noted the holiday.
"Actually, the market is holding better than you might expect given those things," Barker said.
Blue chip losers included the nation’s three big automakers, trading lower on a report in the Financial Times that Ford Motor, General Motors and DaimlerChrysler are slashing production by a further 196,000 vehicles before the end of the year. Ford fell 51 cents to $17.16, General Motors lost 61 cents to trade at $41.75, and DaimlerChrysler slipped 30 cents to $33.82.
The tech sector fared a little better, posting narrow gains and losses for the most part. Dell Computer, which affirmed its earnings outlook last week, rose 28 cents to $22.84. Nextel Communications fell 74 cents to $8 after Merrill Lynch reduced its rating on the wireless networker’s stock.
Analysts expect the market to fluctuate in a narrow range throughout the week as investors continue to trade carefully amid the retaliation.
"My feeling is, if there are no significant casualties on the U.S. side and the strikes continue with no difficulties, the market will be quiet and stable with more of a wait-and-see attitude," Barker said.
Copyright ©2001 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
Talk to us
> Give us your news tips.
> Send us a letter to the editor.
> More Herald contact information.