Wall Street: Monday close
STOCKS initially plummeted on Monday after the crash of a passenger plane in New York rekindled the horror of the 11 September terror attacks, but the market rebounded quickly after it became clear the crash was likely an accident.
'The plumes of smoke floating into the New York sky probably just brought back so many bad memories that just as an emotional knee-jerk reaction, we sold off,' said Charles Payne, analyst at Wall Street Strategies. 'Obviously, people believe this was not a terrorist attack...so I think a lot of folks are looking at the opportunity to buy some of these stocks on weakness.'
Wall Street skidded at the open with major indexes down more than 2% after an American Airlines plane carrying 246 passengers and nine crew bound for the Dominican Republic crashed on take-off from New York's John F. Kennedy Airport. News of the crash, which pummelled airline, hotel and leisure stocks, brought back memories of the September attacks that sent financial markets reeling.
But stocks later regained lost ground as federal officials said early information suggested the crash was accidental. Technology stocks edged higher on a solid forecast from communications gear maker Ciena.
The blue-chip Dow Jones Industrial Average ended down 53.63 points, or 0.6%, at 9,554.37, after sinking more than 2%. United Technology, which makes aircraft engines, lost $1.76 to $55.30, and Honeywell International shed $1.21 to $30.52 - the two accounting for about 44% of the Dow's loss. The Nasdaq composite index gained 11.65 points, or 0.6%, to end at 1840.13, after a 2.5% loss. It was the Nasdaq's highest close since 29 August.
Hotel and airline stocks fell across the board. 'If anyone was on the fence deciding if they should fly into the holiday season, I think some portion of that is going to be derailed by the crash,' said Bailey Dalton, analyst at CE Unterberg Towbin. 'It's unfortunate because they were starting to hit their stride.'
AMR, parent of American Airlines, sank $1.64 to $16.49, or more than 9%. UAL, parent of United Airlines, dropped 59 cents to $10.33. Continental Airlines sank $1.60 to $16. Delta Air Lines surrendered $2.72 to $23.27.
The S&P hotel index dropped 1.52%. Marriott International slumped $1.50 to $32.50. Among other travel-related stocks, cruise ship giant Royal Caribbean International tumbled 92 cents to $11.91, while among online travel firms, Priceline.com lost 22 cents to $4.28.
Boeing chief executive Phil Condit said it would take more than two years for commercial airline traffic to recover from the September attacks, noting that during this time, the aerospace company will lose production of more than 1,000 planes. Boeing, a Dow stock, lost 18 cents to $33.06.
Among techs, Ciena said its earnings could exceed analysts' consensus, adding it would slash its workforce by 10% and take a $1.7bn (£1.1bn) charge. Its stock rose $1.65 to $18.83.
Other networking or telecommunications equipment stocks also rallied. Juniper Networks added 55 cents to $23.99, while Extreme Networks gained $1.04 to $15.15. Industry leader Nortel Networks added 17 cents to $6.91, or 2.5%, while JDS Uniphase, the fiber-optic component maker, advanced 46 cents to $9.63.
Security device makers and security services companies headed higher. InVision Technologies, which makes sophisticated scanners used in airports to detect explosives, surged $1.048 to $13.348, or 8.5%.
Enron, the most active on the NYSE, rose 61 cents to $9.24 after the once-mighty company agreed to be bought out by its smaller power-trading rival Dynegy for the fire-sale price of some $9bn in stock. Dynegy racked up a gain of $5.55 to $44.31, or 14%.
