NEW YORK (CNNfn) - Wall Street staged a powerful comeback Wednesday when late buying saved the major U.S. stock indexes from a second staggering loss this week.|
The Dow Jones industrial average, down more than 423 points at one point during the day, ended with a loss of just 144 points, or 1.6 percent.
Other indexes saw a similar rebound, which some analysts attributed to short-covering, or investors buying back shares they mistakenly thought would fall. Others cited technical trading: the Standard & Poor's 500 index broke below 1,000 for the first time in nearly three years, but could not hold that level.
"It's really good to see," said David Briggs, head of equity trading at Federated Investors, "that there are levels when buyers step in."
Still, the major indexes fell for a third day amid signs that last week's deadly terrorist attack took a big bite out of corporate profits.
Eastman Kodak and Charles Schwab joined Honeywell, American Express and more than 30 other companies to warn about shortfalls in the days since hijacked planes destroyed the World Trade Center and part of the Pentagon.
"The main thing is how this tragedy is going to impact the economy, and obviously it's negative," said Donald Selkin, chief investment strategist at Joseph Gunnar.
International tension mixed with economic uncertainty as CNN reported late in the trading session that the United States will begin moving at least 100 aircraft to the Persian Gulf region as soon as Thursday.
In the three trading says since the attack, the Dow industrials have fallen 8.8 percent while the Nasdaq has tumbled 10 percent.
On Wednesday, the Dow shed 144.27, or 1.6 percent, to 8,759.13, two days after tumbling more than 680 points for its biggest point drop in history.
The Nasdaq, which shed as much as 104 points during the session, ended down just 27.28, or 1.7 percent, at 1,527.80. The Standard & Poor's 500 index fell 16.64, or 1.6 percent, to 1,016.10.
More stocks fell than rose as the New York Stock Exchange saw its second-busiest trading session on record. Declining stocks topped advancing ones by a 3-to-1 margin at the NYSE, where 2.1 billion shares traded. Nasdaq losers beat winners by a 2-to-1 edge as 2.4 billion shares changed hands.
In other markets, the dollar weakened against the euro and rose versus the yen. Treasury securities were mostly higher.
The deadly attack's destruction, and possible U.S. retaliation and more violence, has clouded a business outlook that Federal Reserve said already was in trouble before the attacks.
Other government data showed that U.S. exports took their biggest drop on record in July, evidence the companies were struggling well before the disaster.
Seven Dow industrial components have lowered financial guidance since last week's tragedy, which disrupted travel, raised insurance claims, and kept Americans out of stores.
"It's going to be tough in the next couple of weeks," said Bryan Piskorowski, market commentator with Prudential Securities.
The biggest loser among the Dow Jones industrial average, Eastman Kodak (EK: down $2.22 to $37.61, Research, Estimates), fell as much as 15 percent after the company said third-quarter earnings will fall well short of forecasts.
The session's other big losers included Honeywell (HON: down $1.93 to $26.58, Research, Estimates), which warned it will miss third-quarter and full-year earnings forecasts one day after American Express (AXP: down $1.38 to $26.00, Research, Estimates) revealed a financial disappointment of its own.
Airlines have been hardest hit by the attack. Aircraft maker Boeing (BA: down $0.53 to $32.61, Research, Estimates) said it will lay off as many as 30,000 workers in its commercial jet unit, joining airlines United and Continental in announcing job cuts.
United Technologies (UTX: down $1.42 to $47.65, Research, Estimates), which makes aircraft engines, saw big declines along with Exxon Mobil (XOM: down $1.07 to $38.41, Research, Estimates), which could suffer amid slowing demand for energy.
Charles Schwab (SCH: down $0.56 to $9.45, Research, Estimates), the nation's largest discount broker, said the loss of four trading days last week may cause it to shave 1 cent from its third-quarter earnings.
"Everybody's holding their breath wondering what the next event is going to be," said Federated Investors' Briggs. "I don't think anybody expects a rally any time soon."
Telecommunications stocks were among the few winners, beneficiaries of declining travel and a heightened need to communicate in times of crisis.
Nokia (NOK: up $0.84 to $16.06, Research, Estimates), the No. 1 maker of mobile phones, rose along with AT&T Wireless (AWE: up $1.02 to $15.00, Research, Estimates) and Sprint PCS (PCS: up $0.90 to $24.78, Research, Estimates).
McDonald's (MCD: up $0.49 to $28.50, Research, Estimates) rose after saying profit including a one-time gain will top Wall Street forecasts, although operating earnings will miss expectations.
Two chip companies offered positive surprises. Genesis Microchip (GNSS: up $5.45 to $25.15, Research, Estimates) raised its second-quarter sales targets because it is shipping more microchips than expected.
Triquint Semiconductor (TQNT: up $0.29 to $18.85, Research, Estimates), which makes communications chips, raised its third-quarter profit target by a penny a share, citing better-than expected cost savings.
Imclone Systems (IMCL: up $6.59 to $56.60, Research, Estimates) rose after Bristol-Myers Squibb said it bought a 20 percent stake in the biotechnology company for $1 billion.
The terrorist attacks have promoted interest-rate cuts by central bankers around the world, causing some economists to up their forecasts for recovery.
The crippling of the country's financial capital brought calls to buy stocks out of patriotism. But that kind of buying has yet to lift a market dealing with uncertainty.
"People are so scared that one minute they feel like there's hope and the next minute they panic and sell a bit," Jim Glickenhaus, portfolio manager of Glickenhaus & Co, told CNNfn.
Click here to send mail to Jake Ulick