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To say this week was extraordinary would be one of the great understatements in recent memory. The week was dominated by commemorations of the first anniversary of the Sept. 11 attacks, but myriad other issues vied for Wall Street's attention.

Solemn observances this week, both public and private, contributed to a diminution of trading volume, particularly on Wednesday. But immediately thereafter Wall Street's focus shifted to issues such as President Bush's speech before the U.N.,

Federal Reserve

Chairman Greenspan's congressional testimony, a slate of economic news, and the beginning of third-quarter confessionals.

The sum of those developments pressured major averages. For the week, the

Dow Jones Industrial Average

fell 1.4%, the

S&P 500

shed 0.5% and the

Nasdaq Composite

lost 0.3%.

"It very difficult to extrapolate

meaning from this week because there were so many different crosscurrents," said Brad Ruderman, managing partner at RCM Partners, a Los Angeles-based hedge fund with over $100 million under management. "It was a very big news week, higher than normal and, of course, you had a very emotional time in the middle of the week."

Major averages' weekly declines were limited by gains on

Monday and Tuesday. The latter day's advance occurred amid upbeat guidance from automakers such as


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and despite warnings from


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. More troubling, the U.S. government also warned, upping its terror threat assessment.

Gains early in the week were also spurred by a belief, among some traders, that stocks would rally if, and as, the Sept. 11 anniversary passed without incident, as had occurred following the July 4 holiday. Initially, stocks did rally sharply when trading began Wednesday, which was delayed for 9/11 memorials.

The emotional session Wednesday was marked by "very bizarre happenings," Ruderman said, recalling the Nasdaq's decision to open trading at 11 a.m. EDT even though the

New York Stock Exchange

didn't begin trading until around noon. "For guys that really care, it created an odd situation," the money manager said. "It caught people off guard."

Originally, the NYSE expected an 11 a.m. opening and the Nasdaq agreed to follow suit. Explaining why the Nasdaq stuck with the original plan, a spokesman said the electronic market was "far along in the process of preparing for an 11:00 a.m. open" when, as Sept. 11 approached, the Big Board said it would wait until the memorial at Ground Zero concluded. "

We couldn't have an open-ended time," the spokesman said, citing technical considerations.

Back to Reality

Shares weakened Wednesday shortly after trading resumed on the Big Board. A

sluggish Beige Book report reminded investors of the economy's shaky footing.

The Beige Book report showed strength in housing and autos and little anywhere else. Friday's better-than-expected retail sales data for August provided some relief of concerns that consumer spending is slipping, notwithstanding a disappointing consumer confidence report from the University of Michigan.

Still, "The risk is consumers will stumble before businesses are ready to pick up the baton -- that's the 'double dip' " scenario, said Edward Leamer, director of the Anderson School of Business at UCLA. "I don't think that's going to happen, but I think we'll see sluggish growth, and some weakening on the consumer side. Until there's some turnaround in business investment, there's no real driver for several quarters ahead."

Low interest rates fueled demand for homes and autos but Leamer worried that that has accelerated sales that might have occurred next year. "That makes interest rate policy more difficult next year," he said. "Lowering interest rates isn't going to have much impact anymore and increasing rates can knock the hell out of anyone who's been waiting" to purchase a house or car.

Greenspan gave no indication this week that the Fed will lower rates at its Sept. 24 meeting. The central bank is highly unlikely to raise rates unless it is compelled to do so by market forces, namely a falling dollar and/or soaring bond yields, neither of which are occurring presently. Greenspan has gambled low rates can keep consumer spending afloat until businesses revive and, thus far, he is mainly winning the bet.

Leamer, who

correctly forecast the 9/11 attacks wouldn't lead to economic calamity and that economic strength

six months later would ameliorate, forecast on Friday it will be "another quarter or two before business are ready" to pick up the proverbial spending baton from consumers. "I think we'll see excess capacity start to cure itself at the end of this year, early next," which will spur business investment and thus hiring, he said. But, "I don't see tech spending returning on the horizon at all. My guess is you'll have weak tech investment for a very long time."

Chips Were Down

In that vein, cautious comments from

Taiwan Semiconductor

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on Wednesday cast a pall on a nascent rally in chip stocks. On Thursday, lowered sales guidance by

Philips Electronics

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and downbeat comments by Lehman Brothers and U.S. Bancorp Piper Jaffray contributed to the week's steepest losses. The Philadelphia Stock Exchange Semiconductor Index fell over 6% Thursday and ended the week down 1.4% after dipping another 1.1% Friday when major averages ended mixed.


Thursday, Wall Street also faced the double-barreled comments from Bush and Greenspan, as well as higher-than-expected jobless claims and current account deficit reports, the latter of which took some starch out of the dollar's preceding rally. Still, the Dollar Index regained its footing Friday and rose 1.1% for the week.

The week's final session partially reflected traders' exhaustion from the aforementioned. In addition, there was the contrast between some upbeat economic news -- namely the retail sales and producer price index data -- and disappointing corporate news, i.e., warnings from




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, and

ESS Technology


. Also, part of Florida's interstate was closed as police and bomb squads examined two cars after receiving a tip about a possible terror threat against Miami. (On Wednesday, two commercial airplanes were rerouted, reminding everyone of the present dangers of terrorism, although both incidents were resolved without physical injuries.)

Friday afternoon, Florida Gov. Jeb Bush said, "It appears that there isn't a terrorist threat as it relates to any kind of detonation device ... in the car," and stocks closed well off their session lows, although the Dow fell 0.8%. Meanwhile, the S&P 500 rose 0.3% and the Comp gained 0.9%.

Aaron L. Task writes daily for In keeping with TSC's editorial policy, he doesn't own or short individual stocks, although he owns stock in He also doesn't invest in hedge funds or other private investment partnerships. He invites you to send your feedback to

Aaron L. Task.