Markets Close Mixed after Plane Crash
Major stock indexes closed mixed but well above early session lows on Monday, after being rattled earlier on news of a fatal plane crash in Queens, New York.
While investors are awaiting for more details to unfold, reports of any sinister acts behind the crash will likely impact markets this week. Early selling on Monday was prompted by concerns that the jet crash might have been terrorist related, but share prices lifted as these concerns subsided.
American Airlines flight 587 was en route to the Dominican Republic with 255 people on board when it fell to the ground shortly after takeoff from JFK International airport.
Airline and travel-related stocks fell in the hours following the crash. American Airlines' parent AMR Corp. (AMR ) is down, while Four Seasons (FS ) and Royal Caribbean (RCL ) also are sharply lower.
Still, Christine Callies of Merrill Lynch thinks investors are learning to tolerate bad news and lingering fears, which she says is a "strong indication that a recession has already been discounted."
The Dow Jones Industrial index fell 53.29 points, or 0.55%, to 9554.71. The Nasdaq index rose 11.65 points, or 0.67%, to 1840.13, led by semiconductor and networking stocks. The broader Standard & Poor's index lost 1.98 points, or 0.18%, to 1118.33.
The S&P 500 has recovered about 16% from its low on Sept. 21, while the Dow and Nasdaq indexes are up 16.5% and 29%, respectively from Sept. 21, says Elaine Garzarelli of Garzarelli Capital in New York.
Among other stocks in the news, Enron (ENE ) inked a definitive pact to be acquired by Dynegy (DYN ) for at least $23 billion, ending a financial crisis that threatened to bankrupt Enron.
Security stocks like Viisage Technology (VISG ) are seen higher following the plane crash.
In a conference call, Ciena (CIEN ) surprised analysts with a higher-than-expected forecast for the fourth quarter. The fiber-optic equipment maker says it will cut it workforce by 380 employees, or about 10%.
On the economic front, Wednesday will bring the much anticipated October retail sales report.
Treasuries were closed Monday for the Veterans Day holiday. Trading will resume on Tuesday.
European markets were lower Monday following news of the plane crash in the U.S. In London, the Financial Times-Stock Exchange 100 index fell 98 points, or 1.87%, to 5,146.20, as Britian's Producers Price index fell 0.6% on a annualized basis -- the largest slide since 1958, raising concerns about deflation. In France, the CAC 40 dropped 137.70 points, or 3.05%, to 4,376.58. And in Germany, the DAX Index was down 89.70 points, or 1.83%, to 4,820.37.
In Asia, the markets ended lower. Japan's Nikkei fell 134.15 points, or 1.31%, to 10,081.56 on losses in exporters and brokerages issues swelled in the afternoon. In Hong Kong, the Hang Seng index lost 16.80 points, or 0.16%, to 10,592.45.
As rebel forces advanced on Kabul, the United Nations said it wanted Afghan politicians to meet within days, make interim arrangements for the Afghan capital and provide the nucleus for a broad-based government to replace the Taliban: wires.
President Bush met with advisers to discuss the American Airlines plane crash in New York. A senior administration official said no threats against airplanes were received. Several officials said there was no evidence of terrorism, neverthelsss, the FBI is checking: wires.
Former President Clinton, facing possible Supreme Court disbarment, asked to resign from practice before the nation's highest court: WSJ.
By Suzanne Robitaille