Airlines Suffering
Airlines are experiencing the most damage as the stock market re-opens for the
first time since the worst terrorist attack ever on America. The Federal
Reserve cut interest rates 50 basis points (.50) before the market opened in
its campaign to provide liquidity to financial markets, but the impact has
been limited as traders sell all but the most defensive of sectors.
Civic leaders including Senators Clinton and
Schumpter, as well as the New York Mayor and Chiefs of Police and Fire, were
on hand for the opening bell, all in a move to restore confidence. But the
Dow joined the Nasdaq Composite and S&P 500 in undercutting its lowest
levels of the year set last spring. The three major indexes are down between
4.25% and 6.96%. The Dow initially plunged 629 points by the time all 30 of
the component stocks finally opened half-an-hour into the trading session,
pulled back, but is now setting new lows.
The Dow is down 652 at 8952, the Nasdaq is down
101.80 at 1593.78, and the S&P 500 is down 51.51 at 1041.07.
Of course, our national air transportation system is
in a crisis and it appears government intervention will be required to bail
out airlines from massive expected losses resulting from the tragedy and to
protect the flying public. The airlines sector
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XAL |
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trading on its lows of the session. United
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UAL |
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and AMR
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AMR |
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Behind airline and the related transport stocks,
security broker/dealers
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(and irreplaceable) human loss from Tuesday’s murderous acts, are also off a
marked 8.12%.
Cyclicals
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semiconductors
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Internets
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GIN |
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As pointed out early this morning on the Insights
from TradersWire, security-related and construction/engineering firms are
bucking the downtrend. Some of the biggest net gainers include Mercury
Computer (MRCY)
up 12.20, Engineered Support Systems (EASI)
up 11.55, PolyCom (PLCM)
up 8.40, InVision (INVN)
up 7.51, CACI International (CACI)
up 7.34, Magal Security Systems (MAGS)
up 4.71 and Visionics (VSNX)
up 4.53.
In other markets, December gold
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GCZ1 |
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traders seek a safe haven for assets. The gold and silver index
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XAU |
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the only sector up more than 1% (+3.71%). Drugs
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.73%.
While the Fed’s .5% rate cut may be having a limited effect, an
apparently coordinated rate cut of .5% by the European Central Bank (ECB),
is causing the dollar to bounce back from the five-month low it struck this
morning. Two-year notes are up slightly, as are shorter-dated Treasury securities,
implying the market believes the Fed will continue cutting rates, but that
the cuts will be inflationary in the longer-term.
Energies also
re-commenced trading at the New York Mercantile Exchange near the disaster
site, in a shortened session that began at 11:45 AM ET. This followed a
shortened electronic-only session on Friday. Nearby October crude oil
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CLV1 |
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