As news spreads of a possible al-Qaida link to a series of bombings in Madrid, investors accelerate their recent sell-off.
By Associated Press
Published March 12, 2004
NEW YORK - Edgy investors sent stocks skidding Thursday as a string of bombings in Madrid overshadowed mostly good economic news and bullish forecasts from several companies. The Dow Jones Industrial Average nosedived nearly 170 points, giving the blue chips their biggest four-day drop in nearly 18 months.
The Spanish government initially blamed Basque separatists for the worst terrorist strike in the nation's history. But police later found a van with detonators and an audiotape of Koranic verses near the site, and an Arabic newspaper in London said it had learned that al-Qaida accepted responsibility. The late-day development caused U.S. markets to shudder.
The Dow sank 168.51, or 1.6 percent, to 10,128.38, leaving it down 3.1 percent for the year. So far this week, the Dow has lost 467.17, giving the index its largest four-day point tumble since early October 2002, when it slid 515.95.
It was also the Dow's biggest two-day point drop since the end of January 2003, when it fell 379.91, or 4.54 percent.
The broader market also fell sharply. The Nasdaq composite index lost 20.26, or 1 percent, to 1,943.89, leaving it down nearly 3 percent for the year. The Standard & Poor's 500 index slumped 17.11, or 1.5 percent, to 1,106.78, down 0.5 percent for 2004.
All three indexes were at their lowest points since December.
"This has been quite a day," said Michael Cuggino, president and manager of the Permanent Portfolio Fund. "This is why you need to be exposed to a lot of different asset classes that can protect you from the different scenarios that come up in a volatile global political climate."
The possible linking of the blasts in Spain to al-Qaida reawakened fears of terrorism on Wall Street. The attacks further rattled investors who already had been selling for three weeks amid uncertainty about the job market and the strength of the economic recovery.
Beyond the terrorism concerns, the market's own dynamics were causing worry among analysts. Usually solid performers were lagging the tech-heavy Nasdaq, which has been the most temperamental gauge in recent months.
National Semiconductor closed up 88 cents at $39.08 after posting quarterly profits that beat expectations on strong sales in the personal computing and wireless markets. That news offered some short-term support for other tech shares. Computer maker Dell Inc. ended the day up 35 cents at $31.99, but chipmaker Texas Instruments lost 48 cents to $29.20 after an earlier rise.
The market gyrations also prompted investors to seek safer positions, and some of the more economically sensitive stocks that saw the steepest losses in the previous session rebounded. Aluminum producer Alcoa Inc. added 7 cents to $34.27, making it the only stock in the Dow 30 to end the day in positive territory.
Transport stocks were another pocket of strength. Yellow Roadway Corp. gained $2.84, or 9.5 percent, to $32.61, after the shipper said its first-quarter earnings were likely to come in at the upper end of forecasts.
Target Corp. emerged as one of the day's biggest winners, advancing $2.97, or 7.1 percent, to $44.70, after saying it was considering selling its Mervyn's and Marshall Field's divisions. Several brokerage analysts issued upgrades on the news.
Declining issues outnumbered advancers more than 3 to 1 on the New York Stock Exchange. Consolidated volume was heavy, with 2.43-billion shares traded, compared with 2.11 billion on Wednesday.
The Russell 2000 index, which tracks smaller company stocks, was down 6.27, or 1.1 percent, at 568.74.
