On Wall Street, it was like two months of emotion on fast forward.
With the jitters of Sept. 11 far from calmed, investors had another tragedy to digest Monday as an American Airlines jet crashed into a residential neighborhood in Queens, N.Y., throwing the markets into a tailspin. By the closing bell, however, the fear had largely subsided, replaced by a grief that's grown all too familiar in New York City.
"The market's betting that this was an accident, and they're looking past it," said Peter Boockvar, equity strategist at Miller Tabak.
Stocks tumbled in the wake of the crash, which happened shortly after 9 a.m. By midday, the reduced likelihood that the crash was related to terrorist sabotaging sent some buyers back to the market.
The averages ended mixed, with the
finishing in positive territory. The tech-dominant index finished up 11.65 points, or 0.6%, to 1840.13. The
slipped 1.98, or 0.2%, to 1118.33. And the
, weighed down by
, ended Monday off 53.63 points, or 0.6%, to 9554.37.
Semiconductor, biotech, Internet and software stocks helped buoy the market, though what had looked like a sure rally couldn't materialize. Before the crash, optical switch maker
a reason to cheer when it said fourth-quarter earnings would meet or exceed analysts' expectations.
The company's own stock soared 9.6% to finish at $18.83, but the collateral benefit was limited:
gained 2.9% to $31.90, while
climbed 6% to $19.50, and
rose 1.8% to $28.38.
Health care stocks were also higher.
gained 3.4% to $43.48, while
was up 2.8% to $25.54.
Foundation Health Systems
also closed higher.
The big losers were the airlines, with
down 9% to $16.48. Their suppliers also fell.
was down 3.1% to $55.30. GE, which built the engines of the crashed jet, lost 2.4% to $39.40.
The American Airlines jet, which carried 246 passengers and nine crew members, was bound for the Dominican Republic. As of Monday afternoon, New York City Mayor Rudolph W. Giuliani said no survivors had been found. According to reports, government officials are investigating the cause of the crash and are not ruling anything out, though they said it does not appear to be terrorism-related.
Fundamental market strategists and technicians said they were heartened by the way stocks traded. "I think it's kind of amazing that things have turned around," said Phil Dow, director of equity strategy at Dain Rauscher. "My sense is that a lot of folks that run pension funds had to put some money back to work in the market, with interest rates coming down in the long end," he said. "The more thoughtful money comes in later during the day," Dow said.
For the rest of the week, Dow expects the market to focus on Wednesday's retail sales -- the only other thing that "could frighten the market," he said. "My sense is that the
economic hurdles this week are less daunting than the hurdles last week, and even then we had an up market."
Richard Dickson, technician at Hillard Lyons, said the market put in a "pretty good performance" even though trading was relatively thin because of the Veterans Day holiday. The bond market was closed for the holiday, too. When volume is thin, there tends to be "a lot of imbalance," Dickson said, and any moves are often exaggerated.
Dickson said one positive sign was that the major averages never seriously tested their major short-term support levels. He also said that if the averages break through last Thursday's highs -- 9721 on the Dow, 1135 on the S&P 500 and 1200 on the Nasdaq -- over the next few days, stocks could succeed in testing their 200-day moving average.
Dan Ament, vice president and financial consultant at the Ament Group-RBC Dain Rauscher, said Monday's trading shows that market participants have been pricing in a "higher degree of uncertainty in the market." Ament believes that while we may see some more profit-taking in the short run, longer-term investors are "less reluctant to be on the sidelines, knowing that over the next 18 months the market should show substantial signs of recovery," with the economic turnaround starting "in the second half of 2002."