Calm on Wall St.
NEW YORK - Wall Street stabilized late Tuesday, one day after economic fallout from terrorist attacks pushed the major indexes to their lowest levels in nearly three years.
Investors continued sizing up the impact of the deadly hijackings, which disrupted businesses and may affected spending decisions for months to come.
"They are still kind of waiting to see the unwinding process that's going to come out of this," Brian Belski, market strategist at US Bancorp Piper Jaffray, told CNNfn, referring to last week's attack.
Airline companies, hit hard in the previous session, bounced back while beaten-up technology stocks rose.
Money fled Treasury securities for a second day amid worries that the government, facing lower tax revenue, will have to borrow more money for defense.
Financial stocks fell following profit warnings from American Express and Citigroup. But gains in retail and industrial stocks offset some of the declines.
The relative stability contrasted with Monday, when the Dow industrials suffered their biggest point loss in history and the Nasdaq composite index fell to its lowest level since autumn 1998.
At 3 p.m. ET, the Dow industrials rose 2.28 to 8.922.70, while the Nasdaq composite index shed 14.77 points to 1,564.78. The Standard & Poor's 500 index fell 2.50 to 1,036.18.
Despite the gains, more stocks fell than rose. On the New York Stock Exchange, declining stocks beat advancing ones 1,658 to 1,387 as 1.05 billion shares traded. Nasdaq losers topped winners 2,003 to 1,615 as 1.1 billion shares changed hands.
Overseas,
Measuring the attack
Airlines hammered in Monday's selloff rose including
For airlines, the attack took a bite out of travel and could deter future flying. The industry, which has announced layoffs and flight cutbacks, has sought support from the government in its request for $24 billion in aid.
Other stocks hit Monday also rose, including Wal-Mart (WMT: up $0.85 to $44.85, Research, Estimates), Home Depot (HD: up $0.13 to $36.33, Research, Estimates), Caterpillar (CAT: up $0.94 to $45.63, Research, Estimates) and IBM (IBM: up $1.51 to $94.85, Research, Estimates).
Still, American Express (AXP: down $3.05 to $27.20, Research, Estimates) said the terrorist attacks, which left its world headquarters uninhabitable for at least several months, will cause its third-quarter profit to fall short, one day after Citigroup (C: down $0.20 to $39.40, Research, Estimates) issued a similar warning.
Fellow Dow member Honeywell (HON: down $0.53 to $28.97, Research, Estimates) warned it will miss third-quarter and full-year earnings forecasts and said it will cut more jobs than previously announced.
J.B. Hunt Transport Services (JBHT: down $4.97 to $14.53, Research, Estimates) also slashed profit forecasts, blaming lower freight demand and higher costs.
"The economy has suffered a shock," Richard Rippe, chief economist at Prudential Securities, told CNN. But Rippe expects only short-lived damage to spending and confidence.
At least 17 companies have issued profit or sales warnings since last Tuesday.
But eBay (EBAY: up $0.43 to $49.83, Research, Estimates), the online auctioneer, said last week's attack will not keep it from meeting third-quarter earnings targets.
Electronics retailer Best Buy (BBY: up $0.87 to $48.87, Research, Estimates), which topped quarterly profit estimates Tuesday, said its third-quarter profit will meet forecasts.
United Technologies (UTX: up $1.53 to $49.03, Research, Estimates) rose following a pummeling Monday, but Johnson & Johnson (JNJ: down $2.29 to $53.53, Research, Estimates) pulled back.
American International Group (AIG: down $0.86 to $70.14, Research, Estimates), the insurer, fell for a second day.
Last Tuesday's attack came amid a difficult time for the economy, which showed almost no growth last spring. Unemployment has risen while stocks have declined. The worst year for profits in a decade has coincided with a big drop in business spending and investment.
However, the latest data offered good news on inflation. The Consumer Price Index rose 0.1 percent in August while the core rate, which strips out food and energy, gained 0.2 percent.
Limited inflation has allowed the Federal Reserve to wage one of its most aggressive interest rate cut campaigns on record. On Monday, central bankers lowered borrowing costs for the eighth time this year. Few economists rule out another rate cut when policy makers meet early next month.
Tuesday marks the Jewish New Year, Rosh Hashanah, a time when trading volume typically slows. But little has been typical this week, which began with the New York Stock Exchange's busiest day ever.
