Military

DATE=10-17-01

TYPE=CORRESPONDENT REPORT

TITLE=WALL ST. WRAP (S&L)

NUMBER=2-2-281940

BYLINE=ELAINE JOHANSON

DATELINE=NEW YORK

CONTENT=

VOICED AT:

INTRO: U-S stock prices drifted lower on Wall Street Wednesday, as word came out of Washington that congressional offices were being screened for the potentially deadly anthrax bacteria. V-O-A correspondent Elaine Johanson reports from New York.

TEXT: The Dow Jones Industrial Average fell 151 points, one-point-six percent, to nine-thousand-232. The broader Standard and Poor's 500 index lost 20 points, almost two percent, while the tech-weighted Nasdaq composite dropped almost four and a half percent.

Besides the widening anthrax scare, analysts say investors were put off (discouraged) by a cautious economic outlook from Federal Reserve chief Alan Greenspan. Mr. Greenspan warned of a drop in productivity levels following the September 11th terrorist attacks, saying the country has sustained an economic shock.

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Veteran market-watcher Art Cashin says both events prompted selling:

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Mr. Greenspan didn't bring very much to the party (failed to encourage investors), and Congress announced it was considering shutting down. Now if you're asking the public to go back to life as normal, but if you want to call Congress you have to leave the message on voice-mail, that's not a big boost to public confidence.

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As investors face the biggest corporate profit decline in a decade, two Dow components reported sharply lower earnings. Computer giant I-B-M came in 19 percent lower than year-ago levels. Computer chip maker Intel reported a 77 percent drop in quarterly profits.

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In other news, Merrill Lynch, the largest U-S stock broker, reportedly may cut 10-thousand jobs, 15 percent of the total, as the company considers cutting back or pulling out of Japan, Canada, Australia and India.

Merrill has already announced 38-hundred job cuts this year.

On the economic front, housing starts, which means the beginning of construction on new homes, rose a surprising one-point-seven percent in September. Economists had predicted a decline, mostly because of the uncertainty that followed the September 11th attacks.

But the news on housing is mixed. Another report shows applications for building permits, an indication of business confidence at construction firms, fell three percent to its lowest level in four years.

The U-S housing market has been relatively unscathed during the economic downturn. Analysts watch the housing numbers very carefully for any nuance of change. Historically, this sector has fallen sharply during the early stage of a recession. (Signed)

NEB/EJ/MAR