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Strategies & Market Trends : John Pitera's Market Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: John Pitera who wrote (4666)	9/21/2001 3:36:33 PM
From: John Pitera	Read Replies (2) \| Respond to of 33421

Dow Headed for Worst Week Since Depression Sep 21 1:01pm ET By Denise Duclaux NEW YORK (Reuters) - Stocks slumped at midday on Friday, leading blue chips to their biggest weekly drop since the Depression, as fears over a long war on terrorism after last week's deadly attacks overshadowed an upbeat earnings outlook from bellwether General Electric Co. . "We are outside the historic envelope," said Paul Cherney, a market analyst at S&P Marketscope. "No one knows when we will bottom." Investors dumped shares for the fifth straight day after hijacked passenger planes slammed into the World Trade Center in New York's financial district and the Pentagon near Washington and claimed thousands of lives ten days ago. Wall Street has tossed major stock indexes down 15 percent to three-year lows as the devastation sparked national mourning, massive layoffs, recession fears and plans for military retaliation. U.S. treasures and gold climbed as investors fled to safe havens. General Electric offered a short-lived respite from the relentless selling after the conglomerate said it was on track to deliver double-digit earnings growth this year. The corporate icon rescued the market from a drop of as much as 5 percent after President Bush prepared the nation for war on Thursday night. "You can't get a historical parallel. We are boxing with a ghost," said Richard Cripps, chief market strategist at Legg Mason Wood Walker. "The market is oversold, but there is always an intangible factor to stock prices and an irrationality that they can reflect. You have to let it run its course." The Dow Jones Industrial Average <.DJI> fell 164.75 points, or 1.97 percent, to 8,211.46, after dropping more than 3 percent around the opening. GE, a Dow component, climbed $1.08 to $31.45 and briefly pushed the blue-chip gauge into positive ground. The technology-loaded Nasdaq composite index <.IXIC> slid 51.36 points, or 3.49 percent, to 1,419.57, after tumbling more than 5 percent. Chip leader Intel Corp. , down $1.02 to $19.67, and software giant Microsoft Corp. , off $2.02 at $48.74, pressured both the Dow and the Nasdaq. The broad Standard & Poor's 500 index <.SPX> fell 19.42 points, or 1.97 percent, to 965.12. Friday's session was marking a sour end to a devastating week for stocks. The Dow has fallen almost 15 percent, putting it on track to post its second-biggest weekly loss ever, after a 15.5 percent weekly slide in 1933, according research firm MarketHistory.com. The Nasdaq has tumbled 16 percent and the S&P 500 has fallen roughly 12 percent this week. "People look at this and say 'Oh my Gosh, if the market is not going to go anywhere and earnings aren't going to come back then the dinner I've been waiting for is going to be postponed even further out, where do I want to park my money?" said Richard Babson, president of Babson-United Investment Advisors, which manages $1.8 billion. Losers trounced winners by a 5-to-1 ratio on the New York Stock Exchange and 4-to-1 on Nasdaq. More than 1 billion shares changed hands on each of the exchanges, twice the average midday volume. The NYSE is on track to have its busiest week in history. Companies ranging from airlines and publishers to financial services firms and software makers have announced steep layoffs after the Sept. 11 attacks. The assaults paralyzed the travel industry, aggravated fears of a recession and threatened to damp consumer confidence. "Every day there are more layoffs and more contraction," said Larry Wachtel, a market analyst at Prudential Securities. "The economy really grinded to a halt and profit projections are changing. You are pushing off economic recovery and you are pushing off profit recovery. And then there is fear." EMC Corp. fell $1.21 to $11.41. The computer storage company said it would cut 10 percent of its work force, or more than 2,000 jobs, and probably report a third quarter loss, blaming a widening recession and slowing technology spending. German-American carmaker DaimlerChrysler AG shed 88 cents to $27.36. Auto makers are being hit by fears that their earnings may be wiped out by weak consumer sentiment. Morgan Stanley added 60 cents to $38.22. The Wall Street firm posted its worst quarter since the financial turmoil of 1998, as investment banking fees dropped and trading revenues slid. Morgan Stanley was the largest tenant in the destroyed World Trade Center but lost miraculously few employees. Palm Inc. fell 43 cents to $1.72. The company pulled the plug on its plan to launch this year a highly anticipated wireless handheld computer, derailing any momentum gained after it delivered first-quarter results that met lowered expectations. ONI Systems Corp. plunged $3.84 to $4.53. The optical communications gear provider said its results for the remainder of the year would fall well short of earlier expectations and it will post charges due to the deteriorating global telecommunications market.