US stocks sank in early morning trading today as companies ranging from publishers to airlines confess to mounting layoffs and shrinking profits after last week's terror attacks - dimming the outlook for the struggling US economy.
The blue-chip Dow Jones industrial average sank 210.21 points, or 2.4 per cent, to 8,548.92. The broader Standard & Poor's 500 Index fell 19.83 points, or 1.95 per cent, to 996.27. The tech-laced Nasdaq Composite Index dropped 34.21 points, or 2.24 per cent, to 1,493.59.
The major market gauges have lost 10 percent since the attacks and have scraped new three-year lows.
Nervous investors kept up their selling for the fourth straight day since the market reopened after hijacked airliners hit the World Trade Center in New York's financial district and slammed part of the Pentagon near Washington.
US Federal Reserve chairman Mr Alan Greenspan told the US Congress today that last week's attacks will damage the economy in the short-term by making Americans fearful of the future but won't dampen bright long-term prospects. The central bank has cut interest rates eight times this year to buoy the economy.
Mr Greenspan said in a speech to the Senate Banking Committee. "The foundations of our free society remain sound, and I am confident that we will recover and prosper as we have in the past."
Many US corporations have announced mass layoffs in the wake of the attacks, with the airline industry alone gearing up to lay off 100,000 employees. The assaults have paralysed the travel industry and are rippling through the already weakening economy, stoking fears of a recession.
AMR fell 74 cents to $19.26 after its unit American Airlines, the world's largest airline, said it would lay off at least 20,000 people to stave off slowing air traffic.
UAL fell 77 cents to $17.99. Its unit, airline United Airlines, said it plans to furlough 20,000 workers.