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Stocks Plummet In Wake Of Attacks
WILLIAM STORCK
Chemical and biotechnology stocks plunged after the Sept. 11 terrorist attacks on the World Trade Center and the Pentagon. The attacks added significantly to investors' already-present fears of possible recession and weak future earnings, fears that had been driving stock prices down in the previous weeks.
When stock markets reopened on Sept. 17, C&EN's 25-company chemical stock index had dropped by 8.4%, to 147, from the closing bell on Sept. 10, while its 15-company biotech index fell 7.5% to 576, both deeper that the 7.1% decline in the Dow Jones industrial average to 8921. C&EN's 10-company pharmaceutical index improved slightly, however, as investors turned to so-called defensive stocks--investments that are considered safe in times of trouble. The drug index was up 0.4% on Sept. 17 to 495 (all C&EN indexes are based on 1992 = 100).
Stock prices continued to deteriorate throughout the week as concern, including the implications of possible military actions, spread. By Sept. 20 (C&EN press time), the Dow Jones had fallen 12.8% from Sept. 10 to close at 8376. Again, C&EN's pharmaceutical index was the least affected, declining just 3.7% to 475 from its pre-attack close. The biotech index fell 12.7% to 544. And the chemical index was down 15.3% to 125. This is the lowest the chemical index has been since second-quarter 1995.
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