NEW YORK, Oct. 17 (UPI) -- NEW YORK, Oct. 17 (UPI) -- Stock prices on the New York Stock Exchange and the Nasdaq Stock Market closed lower in choppy trading Wednesday as news of additional anthrax exposure offset initial gains generated by favorable earnings and comments from Alan Greenspan.
The blue-chip Dow Jones industrial average, which gained 36.61 points Tuesday, lost 151.26 points or 1.64 percent to 9,232.97. The key index had been up more than 104 points earlier in the session.
The tech-heavy Nasdaq composite index, which rose 25.76 points in the previous session, retreated 75.73 points or 4.6 percent to 1,646.34.
The broader New York Stock Exchange composite index fell 7.35 to 557.92 while the Standard & Poor's 500 index slipped 20.45 to 1,077.09.
The American Stock Exchange composite index fell 7.52 points to 823.01 while the Wilshire Smallcap Index slid 15.13 to 642.56.
Big Board volume totaled 1.676 billion shares with decliners topping advancers by 19 to 11. Nasdaq volume reached 2.276 billion shares.
Analysts said stocks lost their early gains following news that more than 20 members of Senator Tom Daschle's staff tested positive for anthrax exposure.
Thousands were tested at special rooms on Capitol Hill. Representatives Dennis Hastert and Richard Gephardt, the Republican and Democratic House leaders, announced that the House of Representatives would recess at the close of business Wednesday to allow a scan of the House office buildings for the presence of anthrax.
Analysts said stocks opened higher, supported by favorable earnings from technology heavyweights Intel Corp. and International Business Machines Corp.
Investors await third quarter results, particularly concerned about how business has fared since last month's terrorist attacks.
The positive earnings reports made them believe business was not as bad as they thought and that an economic recovery could be under way. Intel, the world's largest chip maker, matched analysts' projections, despite a large drop in profit from last year. IBM's report showed that the computer giant slightly exceeded the consensus for the third quarter.
Analysts said stocks also got a lift from comments by Federal Reserve Chairman Alan Greenspan. In testimony at the Joint Economic Committee of Congress, Greenspan said that U.S. consumers and businesses have pulled back from spending after the Sept. 11 attacks, but also expressed hope the economic impact has been a one-time and likely temporary event.
"The pronounced rise in uncertainty also has damped consumer spending and capital investment; households and businesses, confronted with heightened uncertainty have pulled back from the marketplace, though that withdrawal has been partial and presumably temporary," Greenspan said.
The Fed chief stressed the uncertainty of the immediate economic outlook. "The shock of the tragedies at the World Trade Center and the Pentagon has reshaped those assessments of risk and required an abrupt realignment of prices in many markets to reflect the expected costs of operating in what we now recognize as a more hostile world," he said.
"But these adjustments in prices and in allocation of resources, when complete, represent one-time level adjustments, without necessary implications for our long-term growth prospects," he said.
Greenspan said the attacks will damage productivity growth, which has been partly responsible for the record U.S. economic expansion that has lasted more than a decade. "The level of productivity growth will presumably undergo a one-time downward adjustment as our economy responds to higher levels of perceived risk but once the adjustment is completed, productivity growth should resume at rates in excess of those that prevailed in the quarter-century preceding 1995," he said.
Greenspan also said he sees a "promising future for our free nation" and acknowledged that "nobody has the capacity to fathom fully how the effects of the tragedy of Sept. 11 will play out in our economy."
The attacks did not destroy the new economy, he said.
On the economic front, the Commerce Department reported U.S. housing starts rose 1.7 percent in September to a seasonally adjusted annual rate of 1.574 million units.
Economists on Wall Street were expecting housing starts to fall 1.8 percent during the month after falling 6.7 percent in August.
The government agency also reported building permit authorization fell 3.0 percent to a seasonally adjusted 1.524 million annual rate during the month -- its lowest level since December 1997 and after posting no change in August.
Meanwhile, U.S. Treasury prices eased. The 30-year bond slipped 4/32 to 100 12/32. Its yield, which moves in the opposite direction of its price, inched up to 5.35 percent from 5.34 percent late Tuesday.
In Europe, stock prices ended higher in moderate trading in London, Frankfurt and Paris. The London International Stock Exchange's blue-chip FTSE-100 index jumped 117.4 points, or 2.31 percent, to 5,200.0. The German DAX index rose 74.82 points, or 1.62 percent, to 4,701.30 and the French CAC-40 index climbed 105.51 points, or 2.45 percent, to 4,414.00.
Analysts said stocks were supported by speculation the European Central Bank will reduce interest rates in the near term and by strength in technology, banks and telecom issues.
Earlier in Asia, prices on the Tokyo Stock Exchange ended higher, lifted by strength in high tech issues sparked by a surge in Internet-related stocks on bargain hunting.
Japan's blue-chip Nikkei Average of 225 selective issues, which rose 185.28 points Tuesday, gained another 117.63 points, or 1.11 percent, to 10,755.45.
Analysts said sentiment toward technology issues was supported by the better-than-expected third quarter results from International Business Machines Corp. IBM beat Wall Street's reduced third quarter views by one cent a share and backed consensus expectations for the fourth quarter.
Analysts also said institutional and individual investors picked up bargains in Internet-related stocks.
In Asia, prices ended higher on the Hong Kong Stock Exchange, lifted by strength in the property sector. The blue-chip Hang Seng Index climbed 112.32 points, or 1.11 percent, to 10,260.81.
Prices also ended higher on the South Korean Stock Exchange, supported by strength in technology issues. The key Kospi Composite Index rose 6.38 points, or 1.22 percent, to 528.29.
Prices also ended higher on the Taiwan Stock Exchange, lifted by strength in chip stocks. The Weighted Index rose 22.27 points, or 0.59 percent, to 3,817.13.
Elsewhere around the region, prices also ended higher on the Australian Stock Exchange. The blue-chip All Ordinaries Index gained 24.20 points, or 0.77 percent, to 3,170.00.
Analysts said stocks were lifted as investors continued to invest in less-volatile resources sector amid ongoing wary over U.S.-led air attacks in Afghanistan and the impact it would bring to the global markets.
