North American stock market indexes dipped back into negative territory by Monday's close as investors again turned antsy

Concern rises

RTGAM

After early afternoon gains, North American stock market indexes dipped back into negative territory by Monday's close as investors again turned antsy over uncertainties surrounding the swine flu outbreak and its rising death toll.


The Dow Jones industrial average closed at 8025, down 51.29 points, or 0.6 per cent. The broader S&P 500 closed at 857.51, down 8.72 points, or 1 per cent.


Airline stocks were hit particularly hard on concerns that flights will be cut back as the flu spreads around the world. Southwest Airlines Co. fell 9.4 per cent and AMR Corp., the parent of American Airlines Inc., fell 13.3 per cent.


Food stocks, especially those with a strong meat flavour to them, were also hit on concerns about the relationship between the flu and pork exports. Tyson Foods Inc. fell 8.8 per cent.


However, these components represent a relatively thin slice of the stock market, which suggests that the declines for the day were also related to concerns about the economy and stock valuations now that the market has bounced impressively from its lows in early March. Among financials, Wells Fargo & Co. fell 5.1 per cent and Citigroup Inc. fell 3.8 per cent.


In other moves, Microsoft Corp. fell 2.4 per cent, DuPont fell 4.5 per cent and Alcoa Inc. fell 3.8 per cent. Pfizer Inc. rose 2.4 per cent and Procter & Gamble rose 0.9 per cent.


General Motors Corp. leapt 20.7 per cent after investors approved of the auto maker's latest plan to stave off bankruptcy protection, which includes phasing out the Pontiac brand, streamlining the number of name plates, reducing the number of U.S. dealerships and cutting jobs and labour costs. GM will also try to convince bond holders to exchange $27-billion (U.S.) worth of debt into common shares.


In Canada, the S&P/TSX composite index closed at 9418.40, down 131.08 points, or 1.4 per cent. Energy stocks were weak after the price of crude oil fell to $50.14 (U.S.) a barrel, down $1.41. Canadian Natural Resources Ltd. fell 2.3 per cent and EnCana Corp. fell 2.5 per cent.


Among financials, Manulife Financial Corp. fell 3.3 per cent and Bank of Nova Scotia fell 3.1 per cent.

Copyright 2001 The Globe and Mail