NEW YORK — Wall Street showed signs of stabilizing Tuesday as investors tried to rebound from Monday's reopening shock wave that sent blue-chip stocks tumbling to their biggest one-day point drop.
In midafternoon trading, the Dow was up 59 points at 8,979.10.
The upturn in the Dow paled in comparison with Monday's loss — the first day of trading since hijacked jetliners smashed into the World Trade Center and the Pentagon — when the blue chips lost a record 684.81 points and fell below 9,000 for the first time in more than 2 1/2 years.
The broader market was also moderately higher Monday with the NASDAQ composite index advancing 8.61 to 1,588.16 and the Standard & Poor's 500 index inching up 4.02 to 1,042.79.
Another sign of the market's attempt to stabilize was apparent in trading volume, which returned to more moderate levels after a
record-breaking session Monday when 2.33 billion shares were traded at the New York Stock Exchange.
Still, analysts expect the market to be weak and vulnerable throughout this week as skittish investors rush to adjust their portfolios. Investors now have more to be nervous about — namely national security — than the weak economy, which had been pulling stocks lower for weeks.
Over the longer term, however, analysts say stock prices will recover. In fact, the massive selling like Monday's might be what the market needs to finally form the bottom that investors have been longing for.
"Weak now, stronger later. There is no question there," said Jon Brorson, director of Northern Trust in Chicago. "The question is how much weakness do we get and when does the turn (upward) come."
Bargain-hunting accounted for much of Tuesday's buying, with Wall Street's winners including airlines, which endured double-digit dollar losses Monday.
Absent a federal government bailout, U.S. commercial airlines are expected to start filing for bankruptcy protection within days, an industry position paper showed on Tuesday.
The documents, which are being presented to members of Congress to rally support for a $24 billion bailout, said cash was short and few sources of revenue were expected to be available.
"Without immediate and significant U.S. government financial support, most of the U.S. airlines that make up the commercial air transportation system will go bankrupt and then likely liquidate shortly thereafter," the documents said.
"Based on the forecast reduction in airline revenues and the current cash positions of the U.S. carriers, U.S. carriers are expected to commence filing for Chapter 11 bankruptcy within days," the documents said.
No specific carriers were mentioned, but Continental Airlines — which has said it would end service to 10 cities and lay off about 12,000 workers — has warned of a potential bankruptcy filing.
Airline chief executives were meeting with administration officials and congressional leaders on Tuesday, trying to build support for their plan.
President Bush has ordered his staff to begin grappling with the economic consequences of last Tuesday's attack. An economic stimulus plan and assistance for airlines are being discussed, a top aide said Tuesday.
"We are moving from a week where we dealt with rescue efforts to dealing with the broader responsibilities of the long-term effects on the economy," presidential counselor Karen Hughes said.