Patriotism not enough to sustain Wall Street

US markets staged a patriotic advance as Wall Street made a delayed start after the memorial services to mark the first anniversary of the September 11th terrorist attacks.

The gains were reversed in the last hour of trading with the Dow Jones closed down 21.44 points, a 0.25 per cent fall. It closed at 8581.17.

European markets closed higher, although their advance looked more like a relief rally that the day's solemn ceremonies in the US had passed off without incident.

In Dublin, the ISEQ closed nearly 1.6 per cent higher despite the late opening on Wall Street.

At the finish of the session, the FTSE 100 showed a 35.2 gain at 4,210.7 a two-day rise of 148.3 or 3.6 per cent.

"There was some work to be done in the first couple of hours but things went very quiet after that," said one European trader. "People were watching the services in New York on television. It really wasn't a proper trading day."

Tens of thousands of people converged for the memorial service at Ground Zero, where almost 3,000 people perished a year ago when hijacked jets struck the north and south towers of the World Trade Centre.

The Dow Jones Industrial Average headed higher from the opening bell, adding to gains made over the previous three trading sessions. By midday, the Dow had risen almost 1 per cent while the Nasdaq composite climbed 1.2 per cent.

"This is a patriotic rally," said Mr Joseph Cangemi, director at Francis P. Maglio & Co. "It's a fight back."

The market drifted toward its fourth straight day of gains as investors picked up battered shares.

The early climb in the markets stood in contrast with the tumble they took following the attacks that killed nearly 3,000 people and toppled the World Trade Centre's twin towers in New York.

But jittery investors reliving the tragic memories were quick to sell and the rally faded an hour into the session after news that Northwest Airlines said it diverted a plane to Fort Smith, Arkansas.

The plane, en route from Memphis to Las Vegas, was diverted after the crew became concerned with the behaviour of four passengers.

Also casting a pall on the market was one more reminder of the soft economic recovery. US economic growth slowed in recent weeks, although activity varied widely by sector, the Federal Reserve reported in its so-called beige book.

"Investors continue to deal with uncertainties associated with the ongoing war on terrorism, homeland security issues, the possibility of an attack on Iraq and a very slow economic expansion," said Mr Fred H Dickson, chief market strategist at D.A. Davidson & Co.

Investors see no reason to get excited about stocks until they hear US President Mr George W. Bush address the UN General Assembly today to make his case against Iraq, and get a feel for how many more companies will be delivering third-quarter earnings warnings, Mr Dickson said. - (Financial Times Service)