Selling Again Hits Most Sectors, but Late Rally Cuts Losses

Updated from 1:31 p.m. EDT

Broad-based selling continued to afflict practically every sector of the market as the weakness in airlines and energy shares spread into defense and basic materials issues, but many groups managed to come off their session lows as a late-day rally swept through the market.

Airlines mostly slid following a brief reprieve Tuesday, but many of the stocks closed above their lows of the day. AMR(AMR Quote), the parent of American Airlines and TWA, fell 1% to $19.81, while Delta Air Lines(DAL Quote) rose 0.5% to $23.03. UAL(UAL Quote), the holding company for United Airlines, dipped 1.8% to $18.65, and Northwest(NWAC Quote) dropped 9.5% to $11.68. Continental,(CAL Quote), which was in positive territory earlier, was back in negative territory, losing 0.7% to $17.59. US Airways(U Quote) also reversed the positive trend, slipping 5.3% to $5.50. Southwest (LUV Quote) was up 1.2% to $13.14.

Technology stocks were shaky, but again rebounded from their lows of the session. Dell(DELL Quote), was off 3.7%, Microsoft(MSFT Quote), down 1.2%, and Oracle(ORCL Quote) slipped 1.1%. Cisco(CSCO Quote) slipped 0.6%, and Sun Microsystems(SUNW Quote) dropped 1.4%. Texas Instruments(TXN Quote) shed 1.8%, and Intel(INTC Quote) lost 5.4%.

Aerospace and defense companies produced mixed results. Raytheon(RTN Quote) finished ahead 3.7% to $32.72. Northrop Grumman(NOC Quote) rose 1.6% to $96.30. Lockheed Martin(LMT Quote) continued to slide, falling 3.3% to $43.14.

Brokerage stocks primarily sold off, but pared their losses by the closing bell. Morgan Stanley(MWD Quote) was unchanged, but Goldman Sachs(GS Quote) rose 0.5% to $67.83. Merrill Lynch(MER Quote) was down 2.1%, while Lehman Brothers(LEH Quote) sank 2.6%. Charles Schwab(SCH Quote) dipped 6.9%.

Bank of America(BAC Quote) was down 0.1%, while Citigroup(C Quote) fell 1.6%, and American Express(AXP Quote) fell 4.5%.

Insurers were also hurting Wednesday with the group facing up to $30 billion in claims from last week's attacks, according to Bloomberg. ACE(ACE Quote) lost 8.2% to $23.87. American International Group(AIG Quote) lost 0.5%, while XL Capital(XL Quote) dropped 4.7% to $65.37.

Energy companies were broadly lower as the price of oil continued to sink. Oil refiner Sunoco(SUN Quote) was off 4.7% to $34.20, while Royal Dutch Petroleum(RD Quote) sank 5.2% to $48.05. Phillips Petroleum(P Quote) slipped 5.1% to $52.84, while Schlumberger(SLB Quote) dipped 7.1% to $44.20. Texaco(TX Quote), Exxon Mobil(XOM Quote), Kerr-McGee(KMG Quote) and Halliburton(HAL Quote) were also lower.

Basic materials stocks, which were mixed earlier, were down across the board in the afternoon. DuPont(DD Quote) and Westvaco(W Quote) were in the red. DuPont fell 0.8% to $35.08, while paper products company Westvaco dropped 3.7% to $25.35. Chemical company Hercules(HPC Quote) fell 3.5% to $8.77. Paper products companies such as Weyerhauser(WY Quote), Williamette Industries(WLL Quote) were lower, but Georgia-Pacific(GP Quote) inched up. Steelmakers Nucor(NUE Quote) and Allegheny Technologies(ATI Quote) lost ground.

Retailers were mixed. Wal-Mart(WMT Quote) rose 0.5%, and Kmart(K Quote) climbed 2.8%. Home Depot(HD Quote) lost 3.8%.

Apparel retailer Gap(GPS Quote) rose 2.4%, while Federated Department Stores(FD Quote) sank 2.6%, to $28. Sears(S Quote) was down 3% to $33.08. Online retailer Amazon.com(AMZN Quote) gained 0.3%, and bookseller Barnes & Noble(BKS Quote) was up 2.2% to $35.60.

In the consumer products arena, Procter & Gamble(PG Quote) rose 0.5%. Philip Morris(MO Quote) slipped 0.6%, and McDonald's(MCD Quote) gained 1.8%. Coca-Cola(KO Quote) tacked on 3 cents to $49.50, and Gillette(G Quote) was down 2.1% to $29.96.

Media stocks, which were trending higher in morning activity, were pushed back, but AOL Time Warner(AOL Quote) was up 1.6% to $30.95, while newspaper publishers Tribune(TRB Quote) and Knight Ridder(KRI Quote) were both down slightly. Gannett Company(GCI Quote) was off a penny to $60.44.