US shares down but off lows midday on profit-taking

Share prices were off their lows at midday, but lower nonetheless as investors took profits on recent sharp gains and behaved cautiously ahead of tomorrow's Federal Reserve meeting on monetary policy and after yesterday's news of the US Airways bankruptcy, dealers said.

Share prices were off their lows at midday, but lower nonetheless as investors took profits on recent sharp gains and behaved cautiously ahead of tomorrow's Federal Reserve meeting on monetary policy and after yesterday's news of the US Airways bankruptcy, dealers said.

At 12.51 pm, the DJIA was down 95.32 at 8,650.13, the S&P 500 down 9.21 at 899.42 and the Nasdaq composite down 7.18 at 2,289.94.

Dealers said the market opened sharply lower, and remained in negative territory at midday, although the major indices were off their earlier lows.

They said the selling, which followed four straight sessions of gains on the DJIA and S&P 500, was nearly across-the-board.

A dealer said investors were somewhat nervous after US Airway's unexpected bankruptcy declaration yesterday and after US and local authorities appeared to be taking very seriously an alleged terrorist threat against San Francisco's Golden Gate Bridge.

In addition, investors, some of whom last week allowed themselves to be lulled into thinking that the FOMC might cut rates this week, now think such an action is unlikely.

However, they consider it possible that the committee's stance towards on the economy will change, signalling possible future cuts.

A dealer aid it was possible the market will turn towards the close of trade, given that in recent weeks investors have tended to stage a rally in the final hour of trade.

US Airways had not opened for trade on the NYSE, On Friday - before the bankruptcy filing - in closed at $2.45.

The bankruptcy announcement caught many industry watchers by surprise as it had been widely believed that the carrier would be able to continue to operate with just US loans.

The bankruptcy news was putting pressure on the entire airline sector.

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