- The Washington Times - Thursday, October 18, 2001

NEW YORK (AP) A disappointing assessment of the economy and news that anthrax has been found on Capitol Hill squelched a surge of optimism on Wall Street yesterday and gave the stock market its worst day in more than three weeks.
The 151-point drop in the Dow Jones Industrial Average was the biggest slide in the blue-chip index since the first week of trading after the Sept. 11 terrorist attacks. The Nasdaq Composite and Standard & Poor's 500 indexes also had their largest declines since that turbulent week.
Federal Reserve Chairman Alan Greenspan's warning of a dip in productivity overshadowed a positive report on housing. And an announcement that the House will close today through Monday to test for anthrax quashed investors' enthusiasm about positive earnings from IBM and J.P. Morgan Chase.
The market's major indicators gave up solid early gains and retreated further as the day wore on.
"We were holding up on the profit front," said Ronald J. Hill, investment strategist for Brown Brothers Harriman & Co. "But those aren't real happy things for the market," particularly the latest anthrax findings, this time on Capitol Hill and the office of New York Gov. George Pataki.
The Dow finished down 151.26 at 9,232.97, according to preliminary calculations, having relinquished an early 104-point advance.
The broader market followed a similar path, with the Nasdaq down 75.73 at 1,646.34 and Standard & Poor's down 20.45 at 1,077.09.
The downturn came as Mr. Greenspan told Congress it's too early to tell how much the economy was hurt by last month's terrorist attacks, although productivity is certain to suffer. Meanwhile, congressional leaders announced that more than 30 people had tested positive for anthrax at the Capitol.
The news increased uncertainty about when the weakened economy will recover and how it will fare as the U.S. retaliates for the terrorists attacks. Investors want to buy stocks, analysts said, but are still frustrated that Mr. Greenspan, along with most companies, can't predict when business will improve.
"If you thought there was no visibility before, there is really no visibility now," said Scott Bleier, chief investment strategist at Prime Charter Ltd.
Investors channeled their frustration into selling despite better-than-expected profits by IBM and J.P. Morgan Chase.
But the two Dow industrials, which beat earnings expectations by a penny a share, hung on to gains with IBM rising $1.05 to $102.90, and J.P. Morgan advancing 66 cents to $34.60.
Among Wall Street's losers were companies that posted disappointing earnings. Data storage company EMC slid $2.24, or nearly 17 percent, to $11.21 after recording a loss of 12 cents a share, 7 cents wider than analysts had anticipated. Consumer products maker Kimberly-Clark fell $1.33 to $54.25 on profits that were a penny a share shy of expectations.
Investors also sold off companies slated to report results today. Microsoft tumbled $2.42 to $56.03, and Sun Microsystems fell 81 cents to $8.80.

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