Economic gloom and the threat of war yesterday deepened Monday's US stock slide, while bonds lost their safe-haven lustre on fears of government debt flooding the market.
US stocks circled the unchanged mark for most of the day, as investors juggled a new-found sense of confidence - relief that Monday's sell-off proved less cataclysmic than feared - with worries of more violence and economic slump.
A tepid rebound fizzled in the late afternoon.
And major market gauges ended down marginally.
Experts still are gauging the economic fallout of last week's terror attacks on the World Trade Centre in New York and the Pentagon outside Washington, which paralyzed Wall Street and left nearly 6,000 missing or dead.
"The markets have changed and the environment has changed completely," said Mr James Park, senior vice-president at brokerageBrean Murray & Co. "We are looking at a lot of uncertainties that will dictate what happens in the market."
Government bonds, which usually gain in uncertain times, fell on news the US Treasury suspended debt buy-backs.
That stirred speculation that the US government may issue more debt as budget surpluses evaporate.
US stocks shed modest early gains and moved back into negative ground in late afternoon trading yesterday having spent much of the session in positive ground as a bout of buying of select stocks briefly pushed the blue-chip Dow Jones Industrial Average above the 9,000-point level.
At the close, the Dow Jones was 17.30 points, or 0.19 per cent, down at 8,903.40.
The technology-heavy Nasdaq fell 24.41 points, or 1.55 per cent, to 1,555.14.
The benchmark Standard & Poor's 500 dropped 6.01 points, or 0.58 per cent, to 1,032.76.
"People are looking to respond to what the market is doing.
"So I don't think they are willing to take any big bets right now," said Mr Peter Gottlieb, portfolio manager at First Albany Asset Management in Chicago.
:quality(70)/cloudfront-eu-central-1.images.arcpublishing.com/irishtimes/VR3765MFOBH2NMV2QNICYDF67M.png)