The situation sounded dire over D.C. fire radios and police scanners. Dispatchers and firefighters reported that dozens of people were emerging from a downtown office building, complaining of uncontrollable coughing and stinging eyes, symptoms of being exposed to a nerve agent.

Firefighters could be heading into a dangerous situation: The building is only two blocks from two international financial institutions that had been mentioned as potential terror targets.

As he drove toward the scene Wednesday, D.C. fire department spokesman Alan Etter called the local office of the Associated Press to pass along a few scraps of information. A few minutes later, the news organization moved an item over its wire service that Etter said firefighters were treating the event as a "mass casualty" incident.

The news reverberated through the financial and media communities, sending the stock market into a 70-point plunge and police pagers buzzing with news that a television station was reporting a terror attack. In a flash, the situation highlighted the pitfalls of communicating breaking news from the nation's capital in the age of terrorism. Within about 20 minutes of the initial report, police officials confirmed the true cause of the scare: teenagers mishandling pepper spray.

D.C. Police Chief Charles H. Ramsey and an outside firefighting expert said yesterday that the situation showed that authorities and reporters need to measure their words during such incidents to ensure that people don't panic.

"This teaches us an important lesson," Ramsey said. "Until you get to the scene and make an assessment, you are better off not making such a comment. It sets off a whole series of events." Ramsey added that he thought the overall response by authorities was appropriate.

John Eversole, chairman of the International Association of Fire Chiefs committee on hazardous materials, said officials must be careful, because "you will say a whole paragraph and someone will emphasize one word."

Within minutes of the AP report, reporters and camera operators scrambled to the scene, where they found ambulances and firetrucks and firefighters in protective suits setting up a decontamination area. Dozens of people had been isolated in a nearby park.

Etter said the confusion might have resulted, in part, from reporters' listening to police scanners. For example, he said, the fire department dispatched its mass casualty unit, which helps handle large incidents involving hazardous materials and multiple injuries.

Firefighters sent the unit as a precaution, Etter said, but some members of the news media might have thought that authorities had encountered massive numbers of victims at the scene.

Etter, recalling his conversation with the AP, said he told the editor that authorities were closing streets near the building, in the 1900 block of I Street NW, and that dozens of people were ill. The editor asked him whether officials were prepared for a mass casualty event, Etter said.

Etter recalled telling the editor that his department was prepared to handle such a catastrophe. He added that firefighters were treating the event as a "potential" mass casualty incident, Etter said.

At 12:58, the AP moved this item: "Alan Etter with the D-C Fire and E-M-S says they are treating the scene at 1990 'I' Street, Northwest, as a 'mass casualty' incident."

Mike Silverman, managing editor of the AP, said last night that the reporter was "confident -- certain" that Etter had not used the word "potential'' to qualify the seriousness of the incident. "We certainly stand behind our reporter on this," Silverman said from New York City, where he is based.

The wire service moved another item three minutes after the first and again reported Etter's comments. Soon, the stock market began its brief slide. About 15 minutes later, it rebounded after police officials reported the cause of the scare: A teenager had accidentally discharged a canister of mace or pepper spray.

The spray entered a ventilation system, sending the fumes through much of the large building, authorities said. No charges were filed against the youths.

Etter said fire officials were evaluating their response to the incident but believe that he and others acted responsibly.

"The bottom line of our jobs is to respond to each incident like it could be the real thing," Etter said. "When you become complacent, people die."

The forceful response of D.C. authorities may have helped shaped the media reaction to what turned out to be an accidental release of pepper spray.