Airlines and brokerages again bore the market's wrath Thursday, although investors were largely indiscriminate in selling off the major sectors.
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) lost 21.2%, to $4.45, while Continental ( CAL) was down 20.4%, to $13.90. AMR ( AMR), the parent of American Airlines and TWA, was off 7.6%, to $18.49, while Delta Air Lines ( DAL) slipped 7.7%, to $21.85. UAL ( UAL), the holding company for United Airlines, sank 9%, to $17.08. Northwest ( NWAC) dumped 8.8%, to $11.01. Among the majors, only Southwest ( LUV) 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.
All but a few tech stocks fell sharply. Boxmaker Dell ( DELL) was off 8.4%, to $17.48, while Oracle ( ORCL) gained 1%, to $11.31. JDS Uniphase ( JDSU) lost ground gained earlier in the session, but closed up 0.35%, to $5.72. Sun Microsystems ( SUNW) skidded 6.9%, to $8.47. Cisco ( CSCO) dropped 4.5%, to $12.88, and was joined in the red by Microsoft ( MSFT), which shed 5.8%, to $50.76. Chipmaker Texas Instruments ( TXN) was off 9.1%, to $21.73, while Intel ( INTC) lost 7.2%, to $20.67.
Brokerage stocks, which were under pressure Wednesday, continued lower. Morgan Stanley dropped 10.4%, to $37.62, while Lehman Brothers ( LEH) sank 9.1%, to $46.64. Goldman Sachs fell 2.6%, Merrill Lynch ( MER) dipped 6.5%, and Charles Schwab ( SCH) fell 5.4%.
Banks and Insurers
Bermuda-based insurer ACE ( ACE) 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) dropped 0.86% and XL Capital ( XL) sank 2.1%. Bank of America ( BAC) was off 2.5%, while American Express ( AXP) was up 0.77% and Citigroup ( C) slipped 5.4%.
Royal Dutch Petroleum ( RD) 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 ) was up 0.21%, while Halliburton ( HAL) was lower by 4.8%.
Some basic material companies were down on Thursday as well. Chemical company Hercules ( HPC) plunged 16.2%, to $7.35. Paper products company Weyerhauser ( WY) was off 4.7%, while steelmaker Nucor ( NUE) stumbled 6.8%.