News Editor

The Dow and the Nasdaq closed Monday at a much lower rate than was expected, but according to Robert "K.T." Cole of A.G. Edwards in Troy, the numbers make the market look worse than it actually is.

"Just the institutions were selling today," Cole said Monday. "There was not a whole lot of panic."

At the end of Monday’s session, the Dow Jones Industrial Average closed down about 684 points, or 7 percent, making it the largest one-day decline in history. The Dow Jones closed below 9,000 points for the first time in more than two and a half years. Its previous record for a one-day drop was 617.78, set on April 14, 2000.

The Nasdaq Composite Index closed down about 166 points, or 7 percent. Other indices also closed lower than expected, including the Standard’s & Poor 500-stock index, which closed about 5 percent lower.

"We saw the largest one-day decline in history," Cole said. "But in percentage terms it didn’t even make the top 10."

Cole attributed the bulk of the decline to two stocks, which dropped a combined 180 points. A number of big companies were buying back their own stocks, Cole said, and there was no problem with liquidity.

"Technically nothing has changed," he said. "An event has occurred and it has shaken confidence in Wall Street, but we saw the most volume on the market with 2.37 billion shares and there were no major glitches."

Trading began Monday morning and the major market indices stabilized and began declining. Many traders, who expected to see a rally Monday when Wall Street reopened after being closed four consecutive trading sessions, were disappointed in the downward spiral. The closing was the longest shutdown since the Great Depression.

Even a surprise half-point cut from the Federal Reserve before trading began failed to inspire any buying.

"We saw an uncharacteristic rate reduction when the Federal Reserve came in and reduced interest rates a half percent," Cole said. "The prime rate is going down and the overnight banking rate is at 3 percent. Now is a good time for people interested in borrowing money to build a house to do so."

The extended outlook for the stock market is not a bleak picture for Cole. He said he expects the market to "bottom out and swing back to the upside.

"The economy may not look great, but the people are looking better," he said. "People think we can overcome this. It’s looking up, considering there is a fiscal stimulus. The federal government will be spending a great deal of money and there will be a lot of spending to rebuild New York."

The market closed Tuesday, Sept. 11 when two hijacked planes crashed into both 110-story towers of the World Trade Center destroying the structures and killing thousands of people. Before the market reopened Monday, a moment of silence was observed in remembrance of the loss.