- The Washington Times - Tuesday, November 13, 2001

Stocks plunged yesterday after the crash of an American Airlines jet but recovered most of their losses later in the session to end the day mixed.
The Dow Jones Industrial Average fell 53.63, or 0.6 percent, to 9554.37. The index was down 2.1 percent before making a comeback.
The Nasdaq Composite Index, which also fell more than 2 percent in early trading, ended up 11.65, or 0.64 percent, to 1840.13. The Standard & Poor's 500 Index fell 1.98, or 0.2 percent, to 1118.33. It had been down about 2 percent as well.
Losses were significant until federal officials said terrorism was unlikely to have caused the jet to crash in the Rockaway area of Queens, N.Y.
White House spokesman Ari Fleisher said the government received no threats and knew of "no unusual communications" between air-traffic controllers and pilots on the American Airlines flight.
Analysts yesterday predicted the disaster would cause little harm to the economy if officials determined mechanical failure caused the crash.
"If it isn't terrorism, if it has any consequence it should be short term. I don't begin to know how to quantify it. It is at least a modest and temporary negative. It's a shame. It's sad. The fog seemed to be lifting, and this puts a little more fog on the scene," said David Orr, chief economist at Wachovia Securities in Charlotte, N.C.
Airline and travel stocks dragged the Dow lower in early trading. AMR Corp., the parent company of American Airlines, lost $1.64 a share, or 9.05 percent, to close at $16.49 a share on the New York Stock Exchange. AMR stock has lost 44 percent of its value since the September 11 terrorist attacks.
Marriott International declined $1.50 to $32.50, and Expedia, the online travel service, tumbled $1.26 to $29.96.
Oil stocks also declined because of concern that consumers will cancel travel plans. Exxon Mobil Corp. shares fell 19 cents to close at $40.06 a share on the New York Stock Exchange.
Meanwhile, investors could not turn to the safety of bonds because the government bond market was closed yesterday in observance of Veterans Day.
Ciena Corp., the Linthicum, Md., fiber-optics equipment maker, was partly responsible for the Nasdaq's recovery. Shares of Ciena rose nearly 10 percent after the company predicted it would meet or beat analysts' expectations with fourth-quarter profits of 4 cents to 6 cents per share. Ciena also said it expects fourth-quarter revenue to reach $367.8 million, up 27 percent from $287.6 million, for the like quarter the previous year.
Ciena also said it will lay off 380 workers, about 10 percent of its work force. Ciena shares rose $1.65 a share to close at $18.83 on the Nasdaq Stock Market.
Gains by technology bellwethers Microsoft Corp. and Intel Corp. helped the Nasdaq close higher. Microsoft shares increased 58 cents to close at $65.79 a share. Intel shares increased 50 cents to close at $28.38 a share.
The Nasdaq's resilience impressed analysts. Some said it does not appear that yesterday's plane crash will stop consumer spending completely and cripple an already weakened economy. The U.S. economy shrank 0.4 percent at an annual rate in the third quarter the first decline since 1993.
"I think in terms of consumer confidence and people's thoughts, it's a horrible coincidence, it's horrible that it's an American Airlines plane and in New York, but the long-term effects will be relatively minimal," said Joel Naroff, president of Naroff Economic Advisors in Holland, Pa.
But in the short term, the crash does little to persuade people that it is safe to fly.
"There's no doubt that [people believe] if you don't have to fly, then why do it?" said Larry Wachtel, stock analyst at Prudential Securities.
Mr. Fleisher said President Bush is continuing to urge people to travel.
Losses widened in European markets after the crash in New York. France's CAC-40 finished the day down 3.1 percent, Britain's FT-SE 100 fell 1.9 percent and Germany's DAX index declined 1.8 percent.
Like the equities markets, the dollar recovered from initial losses to end the trading day mixed against other currencies. The dollar climbed to 120.44 Japanese yen, up from 120.32 yen late Friday, after sinking to 119.75 earlier in New York trading. The dollar weakened to 89.44 cents against the euro from 89.38 Friday.


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