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Wall Street resumes trading but stocks fall sharply

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NEW YORK — Scared investors sent stocks plummeting as Wall Street ended its longest shutdown since the Great Depression and resumed trading Monday for the first time since last week's terrorist attack. The Dow Jones industrial average fell as much as 629 points, dropping below 9,000 for the first time in more than 2 1/2 years, before regaining some ground.

The initial heavy selling was widely expected in a market already fragile because of poor corporate profits and outlooks. And since the attacks, which shut the nation's stock market for four days, the major airlines have announced cutbacks and reduced schedules, adding to investors' nervousness about the future.

But the Federal Reserve, hoping to boost the economy and the market's confidence, cut interest rates by a half-point — the eighth rate cut so far this year — an hour before trading began.

The nation's financial leaders had called on investors to treat the market's reopening as a buying opportunity instead of a reason to sell.

One of the country's best-known investors, Warren Buffett, said Sunday on the CBS program "60 Minutes," "I won't be selling anything."

"If prices would fall significantly, there's some things I might buy," Buffett said. "But ... it's not a different country economically than it was a week ago."

New York Stock Exchange chairman Richard A. Grasso was sanguine about the volatility after the opening bell: "Today's market is not important. It's the market a year from now, two years from now."

The Dow fell in 50- and 100-point bursts as its 30 components opened for trading. When American Express, the last stock to open, began trading, the Dow's loss crossed the 600-point mark.

By late morning, the market regained some ground — another expected turn in what was likely to be a difficult day. The Dow was off 463 points while the Nasdaq was down 75.

While the point declines in the Dow and Nasdaq were very large, their percentage losses were more moderate, with both indexes off about 5 percent.

Before trading began, the New York Stock Exchange observed two minutes of silence followed by the singing of "God Bless America."

The opening bell was rung by members of the Police and Fire departments along with representatives of other agencies involved in the rescue and recovery efforts at the World Trade Center disaster site.

"Let us celebrate these wonderful men and women," Grasso said, calling them "our heroes." He was surrounded by federal, state and local officials on a balcony overlooking the exchange floor.

Outside, a huge American flag was draped across the NYSE's famed columns.

The four-day market closing was the longest for the NYSE since March 1933 when the government shuttered the exchange for more than a week for a banking holiday during the Depression.

On Monday, Nick Matera of Staten Island arrived at the NYSE in the blue jacket of a trading floor worker.

He called the opening "symbolic more than anything else" and noted the changed environment, saying: "It's an odd feeling with the smoke and all."

Businesses spent the weekend cleaning up the debris littering the financial district. Utility workers laid and rewired thousands of cables to restore telecommunications and power, while the city prepared the subway system for its first real use in nearly a week.

But challenges remain.

Although the larger investment houses have relocated their operations in backup locations outside the financial district, others struggled to get their offices up and running.

"They're opening the exchange so that every individual investor can participate, but we can't because we don't have connectivity," said Ray Velez, a manager at a day-trading firm near the NYSE that lacks access to the Internet and other data services needed to compete in the markets.

A variety of steps were being taken to smooth the resumption of trading.

The Securities and Exchange Commission has announced a series of rules that, among other things, make it easier for firms to buy back their own stock.

Grasso said there would be no constraints on trading, with limit orders being processed as well as short sales, those in which traders make money by betting the market goes down. He also said the NYSE should be able to handle any volume of trading, noting that the exchange has the capacity for five times the current average daily volume of about 1.2 billion shares.

Some workers returning to the Wall Street area for the first time expressed their fears.

"You sit next to the window and keep thinking, am I going to turn around and see a plane coming," said Jeannette Rosario, who works in information technology for an exchange clearing house.