Stocks drop sharply for third time in four sessions

Stocks fell sharply yesterday for the third time in four sessions, with the Dow closing at a near three-year low amid fears of severe economic repercussions from last week's terrorist attacks.

The Dow Jones industrial average fell more than 380 points, bringing its loss this week to 1,229 points or nearly 13% and putting the index in line for its biggest one-week point drop.

It fell 4.4%, at 8,376.21. It last closed below 8,400 in October 1998. Unless the blue chips rally substantially today, they are likely to have their biggest one-week point drop, eclipsing the 821.21 they fell in the week ending March 16.

The broader market was also down, with the Nasdaq composite index falling 56.87, or 3.7%, to 1,470.93 and the Standard & Poor's 500 index off 31.56, or 3.1%, at 984.54.

This is the first time the S&P 500, considered the market's best indicator, has closed below 1,000 since October 1998.

The selling was expected after a turbulent session Wednesday, when the Dow fell more than 400 points but recovered to a loss of 144.

But the market's anxiety increased yesterday as Federal Reserve Chairman Alan Greenspan told Congress the attacks had disrupted the business activity in a number of ways, including a drop in consumer spending and travel and the stock market's four-day shutdown last week.

In keeping with investors' fears that practically all businesses will be hurt, Thursday's selling was again spread across an array of sectors.

Boeing, which has announced it will cut as many as 30,000 jobs, fell $2.85 to $29.76. Implementing the first of its 12,000 lay-offs today, Continental Airlines dropped $3.56 to $13.90.

Insurer American International Group, which said last week it expected its pretax losses from the attack to total $500m, fell 60 cents to $68.90. Banker Citigroup declined $2.09 to $36.36, while brokerage house Merrill Lynch fell $2.49 to $36.01.