Airlines, Brokerages Again Feel Market's Wrath

Updated from 12:43 p.m. EDT

Airlines and brokerages again bore the market's wrath Thursday, although investors were largely indiscriminate in selling off the major sectors.

Airlines

Airlines were again hammered on growing concern about cash burn rates and evaporating demand, with some losing as much as one-fifth of their value. US Airways(U Quote) lost 21.2%, to $4.45, while Continental(CAL Quote) was down 20.4%, to $13.90.

AMR(AMR Quote), the parent of American Airlines and TWA, was off 7.6%, to $18.49, while Delta Air Lines(DAL Quote) slipped 7.7%, to $21.85. UAL(UAL Quote), the holding company for United Airlines, sank 9%, to $17.08. Northwest(NWAC Quote) dumped 8.8%, to $11.01. Among the majors, only Southwest(LUV Quote) held its ground, ending roughly unchanged at $12.82.

Not helping matters was Standard & Poor's announcement that it cut its credit and debt ratings for a number of U.S. airlines, including American, Continental, Delta, United, and US Airways. The agency said that the effects of the terrorist attacks last week and the already "grim airline industry outlook" will lead to a slow recovery.

Technology

All but a few tech stocks fell sharply. Boxmaker Dell(DELL Quote) was off 8.4%, to $17.48, while Oracle(ORCL Quote) gained 1%, to $11.31. JDS Uniphase(JDSU Quote) lost ground gained earlier in the session, but closed up 0.35%, to $5.72. Sun Microsystems(SUNW Quote) skidded 6.9%, to $8.47.

Cisco(CSCO Quote) dropped 4.5%, to $12.88, and was joined in the red by Microsoft(MSFT Quote), which shed 5.8%, to $50.76. Chipmaker Texas Instruments(TXN Quote) was off 9.1%, to $21.73, while Intel(INTC Quote) lost 7.2%, to $20.67.

Brokerages

Brokerage stocks, which were under pressure Wednesday, continued lower. Morgan Stanley dropped 10.4%, to $37.62, while Lehman Brothers(LEH Quote) sank 9.1%, to $46.64. Goldman Sachs fell 2.6%, Merrill Lynch(MER Quote) dipped 6.5%, and Charles Schwab(SCH Quote) fell 5.4%.

Banks and Insurers

Bermuda-based insurer ACE(ACE Quote) was punished following a report that it wouldn't invoke an "act of war" provision to avoid paying claims associated with the terrorist attacks last week. Shares were off 12.7%, to $20.95. Others in the sector were relatively unaffected as American International Group(AIG Quote) dropped 0.86% and XL Capital(XL Quote) sank 2.1%.

Bank of America(BAC Quote) was off 2.5%, while American Express(AXP Quote) was up 0.77% and Citigroup(C Quote) slipped 5.4%.

Energy

Royal Dutch Petroleum(RD Quote) was reeling after it reduced its annual growth projection in oil and gas volumes through 2005. Shares were off 6.7%, to $44.81. The rest of the sector was mixed. Kerr-McGee(KMG Quote) was up 0.21%, while Halliburton(HAL Quote) was lower by 4.8%.

Basic Materials

Some basic material companies were down on Thursday as well. Chemical company Hercules(HPC Quote) plunged 16.2%, to $7.35. Paper products company Weyerhauser(WY Quote) was off 4.7%, while steelmaker Nucor(NUE Quote) stumbled 6.8%.