Markets Stabilize After Early Losses

September 17, 2001 ( - The Dow Jones Industrial Average fell by more than 600 points at one point, after trading resumed following the terrorist attack on the World Trade Center that crippled the financial district last week.

By midday,

  • the Dow Jones Industrial Average had recovered slightly, reporting losses of 477 points
  • the S&P 500 had fallen by 38 points, and
  • Nasdaq was down by 73 points.

The insurance and airlines sectors were hardest hit, with the Amex Airline Index falling to its lowest level since it was activated in 1996, falling 39% by midday.

All stocks in the sector were sharply lower following the two-day shutdown of US airspace and strict security measures, which will impact profitability. US Air fell 45%, Delta was down by 39%, UAL Corp, parent company of American Airlines, plummeted by 40%, while shares of America West fell by 70% in midday trading.

Travel-related Internet stocks moved in tandem with airline stocks, with names such as falling by 25%.

Over 18 insurers have reported their property and life insurance exposure at the World Trade Center is in excess of $100 million each. Nevertheless, many insurers have said they will honor their policies, despite the fact that the damage may be classified as a result of an Act of War, an exclusion in many policies.