One Austintown broker had 45 client calls by midafternoon Monday, and all but one were requests to buy stock.
By DON SHILLING
and CYNTHIA VINARSKY
VINDICATOR BUSINESS STAFF
Local stockbrokers were expecting the worst when they opened for business Monday morning, but amid reports of plummeting stock prices and heavy selling, their phones started ringing -- with orders to buy.
Patriotic investors, some with only a few hundred dollars to spend, were outnumbering investors selling stock at some local brokerage offices.
"It's been incredible. People are calling up, saying they've seen that the patriotic thing to do is to invest in American business, and they want to buy some stock," said Michael Dunham, assistant compliance director for WRP Investments in Liberty Township.
"It floored us. A lot of these are people we've never seen before."
44 to 1: Tim Clymer, an Edward Jones representative based in Austintown, said his office had 44 buy orders and just one sell order by midafternoon. "I'm not surprised," he said. "It just says a lot about the fiber of Americans."
Stock prices tumbled when Wall Street resumed trading Monday after its longest shutdown since the Great Depression, and the drop was due partly to panic selling by investors.
The Dow Jones industrial average had dropped more than 660 points by midmorning, below 9,000 for the first time since December 1998. The Nasdaq and other major indexes also fell in the first session since last week's terrorist attacks.
Hardest hit: Airline, insurance and entertainment stocks were among the hardest hit.
Dunham acknowledged that WRP has had its "fair share of selling," but most of the sales were ordered last week before the stock market reopened. "To be honest, it hasn't been as bad as we thought it might be," he said.
Officials at Youngstown-based WRP Investments decided to reduce commissions for new buyers when the first patriotic investor called Monday morning. "We figured, they were doing their part, we could do our part," he said. "It warms your heart."
Clymer said his office received calls from regular investors and from new investors, all of them interested in supporting American business. Some wanted to invest $1,000 or $2,000, some had even smaller amounts to offer.
Selling by institutional stock holders was probably contributing largely to the drop in prices Monday, Clymer theorized, adding that the panic sell-off could be seen as a boon for investors.
Comeback will happen: "It's an excellent time to invest," he said. "Historically, we know the prices will come back. Two years from now, they'll be glad they bought."
Butler Wick & amp; Co. in Youngstown helped a dozen patriotic investors set up investment accounts for the first time, said David Bennett, senior vice president.
He said these investors wanted to show their support for the country. Their investments ranged from $100 to $1,000 and were in major companies such as General Electric and Microsoft.
Plenty of regular investors called Monday, and most said they were looking for bargains, Bennett said.
"We haven't had anyone saying 'Just get me out,'" he said.
Butler Wick brokers worked the phones last week, talking to customers and setting up strategy for this week, he said.
Bennett said sell orders on the market Monday were probably split between institutional investors who needed to raise cash and other investors who were concerned about threats of war and wanted to switch investments to Treasury securities and gold.
Stocks' reduced risk: He said he thinks stocks remain a good investment, however. Another cut in interest rates Monday reduces the yield on Treasury investments, while the lower prices in the stock market reduces the risk of buying stock, he said.
Howard Vari, vice president at First Union Securities in Canfield, said he had received four times more buy orders than sell orders Monday.
"If you're a long-term investor, when the market is down badly, those are really buying opportunities," he said.
Most people, however, were just calling to talk, he said.
The reassurance he offered them was that First Union statistics show that stocks always decline after a disaster but bounce back even higher. Of 25 disasters that were tracked, the median decline in stock prices was 8 percent, but the median recovery after six months was 12 percent.