By Jerry Knight
Washington Post Staff Writer
Thursday, September 20, 2001; 6:26 PM

The stock market plunged again today as Wall Street’s burned out, stressed out traders struggled to minimize the growing economic damage from the World Trade Center attack -- damage that continues to spread around the world.

The Dow Jones industrial average fell nearly 383 points to 8,376.21 and the Nasdaq Stock Market composite index fell almost 57 points to 1,470.93. Both are down 13 percent in the four days since trading resumed.

The Standard & Poor's 500 stock index fell more than 31 points to 984.54, down 10 percent for the week.

European stocks fell as well, hitting a four-year low in London, as the world's two largest insurance companies doubled their estimates of losses from the attack, European airlines joined U.S. carriers in cutting flights, and even overtly optimistic statements from Federal Reserve Chairman Alan Greenspan failed to rally the troops.

"I am confident that we will recover and prosper," Greenspan testified at a congressional hearing. But that will take time, he said. "The terrorism of Sept. 11 will, doubtless, have significant effects on the U.S. economy over the short term."

Those effects drove down stock prices across broad sectors of the economy -- airlines, hotels, travel, high tech, housing and media stocks all fell. Three quarters of Nasdaq's 100 largest stocks were off. Only 3 of the 30 Dow Jones industrials were up for the day and the only big winner was SBC Communications, which is expected to benefit by growth in mobile phone customers in the wake of the attack.

Fear of flying once again drove down prices of airline stocks -- and any company connected to the industry. US Airways Inc. and Atlantic Coast Airline Holdings Inc. both dropped 23 percent as Congress debated how big a bailout to give the airline industry. The Dow's worst loser was United Technologies Inc., which makes aircraft engines. Falling another $6 to around $41, the stock is down $25 for the week.

What Congress will do to aid the airlines and when passengers will go back on the planes are the kind of unanswerable questions that are driving down stock prices, analysts said.

"The biggest problem in the market is the market hates uncertainty. That's going to go on forever," said Al Goldman, chief market strategist at A.G. Edwards, a brokerage firm based in St. Louis.

Goldman said Wall Street is still suffering from the emotional strain of trying to trade near-record numbers of shares while workers have still not recovered most of the 6,000 bodies buried in the rubble a few blocks away.

"I've never had more mental fatigue," he said.

Agreed Brian Belski of U.S. Bancorp Piper Jaffray: "This has hit our industry directly. We're all trying to do our best for our clients . . . [but] how long can you continue on with this pace?"

Tomorrow is likely to be no better because it is "Triple Witching Day" when options and futures contracts expire, often making the markets even more volatile.

One of the few positive economic developments today was another drop in home mortgage rates -- which are falling because of the Fed's efforts to reverse the economic slowdown. Freddie Mac reported that 30-year fixed-rate mortgages fell to 6.8 percent and 15-year mortgages dropped to 6.3 percent, both their lowest level in two years.

But despite such low rates, the homebuilding business is weakening.

New home construction figures for August issued today by the Commerce Department showed more evidence that the economy was slowing even before the attack on the World Trade Center. The pace of homebuilding fell almost 7 percent to 1.5 million houses a year, the slowest rate since last October.

Homebuilding stocks continued to skid with NVR Inc., the Washington region's biggest builder falling again today by $6.25 to $132.75, down $35 in the past two weeks.

After today's losses, all the indicators have fallen to their lowest level in more than two years, an unnerving development for technical analysts who assess the market based entirely on trading patterns rather than economic developments or corporate fundamentals. From their perspective, the markets are literally off the charts.

"It's still too early to be a bottom picker," advised Ralph Acampora, the widely-quoted technical analyst for Prudential Financial in his daily memo to clients. Eastman Kodak, which lead the Dow down Wednesday, fell another $5. Microsoft stock fell more than $3 as prospects dimmed for a negotiated settlement in the company's anti-trust case. Home Depot was off as well, suffering both from the decline in new home construction and what Greenspan warned is likely to be a radical drop in consumer spending.

The Walt Disney Co., which owns the ABC television network, also fell sharply because one of its biggest shareholders was forced to dump 135 million shares to meet a margin call. Texas billionaire Sid Richardson Bass had borrowed money against his Disney stock, and had to sell out when the value of the shares fell. Disney stock has been battered because TV stations have lost more than $1 billion in advertising since the crisis began, while simultaneously spending millions on news coverage.

Shares of Washington's largest media companies continued to decline. Shares of the Washington Post Co. fell $20 a share to $494.50, the lowest in the past 12 months. Shares of Gannet Co. Inc., fell $4.89 to $55.55 and the stock of Radio One Inc. slipped 17 cents to $10.03.