BEDLAM ON WALL STREET : Across Nation, a Feeling of Shock, Fear

Investors, stockbrokers and traders across the country were dazed by the dizzying nose dive in the stock market on Monday.

“It was a gut-wrenching day, a terrible day,” moaned Michael Meer, a broker and trader for Haas Securities in New York, who took shelter at a Wall Street bar after the market’s close. “I’m very nervous about tomorrow. This may be the end of the yuppie era.”

A computer specialist who left work to spend the day at a Laguna Hills brokerage sighed: “I could go cry. Or I could pound on my heart, but it wouldn’t do any good.”

At the scene of the debacle in New York’s financial district, crowds caught up in the frenzy that pervaded the area queued up at the visitors’ entrance of the New York Stock Exchange on Broad Street. “We were just going to have lunch but thought this might be a historic occasion,” said Margaret Thomas of Delray Beach, Fla. “Has anybody jumped yet?”

Two British women overheard a conversation about the stock market crash in a Woolworth store in New York and decided to head off for some stock exchange sightsee ing. “To see it at its best, or at its worst, as it were,” said Sally Penn of Bristol. “We picked a good day anyway, didn’t we?”

By 5:30 p.m., the New York Police Department had dispatched officers to control the crowds jamming the Wall Street district.

After the market closed, brokers scattered to bars to share the wealth of misery. At Harry’s at the American Stock Exchange (renamed Harry’s at the Late American Stock Exchange by a cynical broker), a hangout in back of the exchange on Greenwich, brokers cut the tension with gallows humor.

“You see a lot of people laughing in here, not because they think it’s funny, but you have to laugh and have to hope that the future will be better,” said one broker.

Five young Dean Witter trainees standing around the bar had just finished an 18-week training program that was designed to prime them to start work next Monday. “Everyone thinks the market’s very glamorous,” said one. “Now, we’re going to have to make cold calls to the general public, which has no confidence.”

Added another young trainee sporting a new maroon tie with gray bulls and bears in combat: “Today is a good buy day--goodby, car. Goodby, house. Goodby, wife.”

It all depended on your perspective. Gerry Fox, a semi-retired San Diego investor, said he planned to keep most of his stock investments, although he was chagrined that blue chips and mutual funds were taking a beating.

‘Deserve to Get Battered’

“My friends are standing their ground,” he said. “This all happened because of programmed trading by institutions. If the little guys will just ignore that, they’ll come out OK. The big guys deserve to get battered if they play games.”

Murray S. Stopol, a Woodland Hills clinical psychologist, was taking the fall good-naturedly. “My retirement is in mutual funds. . . . I’m in nothing extremely speculative, but I’m sure they’ve been hit.

“But worrying doesn’t do you any good. And it’s not that my head’s in the sand. I’m aware of what’s going on.”

But some investors figured they got burned enough for a lifetime. Stuart D. Meyers, a 40-year-old attorney in Beverly Hills, on Monday sold off 1,800 shares of a Drexel Burnham Lambert mutual fund that he had bought just 10 months ago with the idea that it would be a nice, conservative pension fund investment. He figures he lost $10,000.

“I felt totally helpless. I didn’t know what to do,” Meyers said. “Everybody was panicking. I had a choice of calling the bluff of the market or just getting out and taking my loss and seeing what happens. I decided to take my loss and stand on the sidelines.”

Asked whether he would get back in the market soon, he said: “Probably never.”

Silence Signals Losses

In contrast with the frenzy at the New York exchanges, the highly automated floor of the Pacific Stock Exchange in Los Angeles was almost silent for most of the day. “You would hear laughter if they were making money. Just that things are quiet means they’re losing,” said Matthew J. Geragos, a floor trader for Seidler Amdec Securities.

When the Dow Jones industrial average had fallen 200 points at about 10:30 a.m. PDT, some traders were still making light jokes. A gray-haired trader wearing suspenders held up two oversized reproductions of dollar bills and yelled across the floor, “This is why we get the big bucks, guys.”

A few minutes later, as the downward trend accelerated, another trader cracked: “This is all a joke. Orson Welles has a part in this. . . . At this rate I’m not going to have any money to pay my parking.”

By the end of trading, however, some traders and specialists were staring silently at the floor. No one was making jokes. Pink and white computer forms littered the floor, inches deep in some corners. “It was ongoing emotion, panic, both ways in the market, buying and selling,” said John E. Martin, an assistant specialist.

“What do you think, spectacular or what? Bigger than the ’29 (crash),” Geragos said.

Some specialists--traders who specialize in several dozen stocks and must buy when everyone else is selling--said even they had trouble placing orders on the New York Stock Exchange. “We were kind of caught here in limbo,” said specialist Jerry A. Barbisan.

He added: “I don’t think there were too many people loading up on the buy side.”

Near the market’s close, brokers at the Beverly Hills office of Dean Witter Reynolds were talking among themselves about the stunning day. “It’s a sick metaphor,” said Carl W. Hulick, senior vice president and branch manager. “It’s like being on board an airline, and one engine goes out. You hope you make it and figure, why not relax and have another drink until the thing rights itself.”

“A few (clients) were panicked and just wanted out--a couple of people in their 50s wanted out of everything,” said Marianne H. Kirwan, a Dean Witter vice president and broker who spent her day trying to soothe panicked investors. “Everything they’ve worked a year for has been taken away in a couple of days, which is very discouraging. I’m doing a little more hand-holding.”

However, she added: “Those who stay cool will make a considerable amount of money (if the market recovers). You can’t be emotional in the market . . . although it takes courage to step into this chaos.”

Trying for Restraint

Frank Randall, branch manager at the Merrill Lynch brokerage in Laguna Hills, said: “We’re trying to get clients to act with restraint. We’re telling them to let the hysteria pass over, to be cool.”

Randall said his brokers are telling clients that if they were bullish in August--when the Dow reached its record high of 2,722.42--then they should be bullish now. Even if investors are pulling some of their money out, he said, they should keep at least 25% of their investment funds in the stock market.

Despite such counseling, worried stock investors gathered at brokerage firms in the area to survey the damage. Although dozens of investors entered and exited the Charles Schwab & Co. office in Laguna Hills during Monday’s market debacle and as many as 25 could be seen huddled by automatic stock quote machines at one time, relatively few were actually trading.

“We’re not here to buy, and we’re not here to sell, I don’t know what we’re doing here,” said one shareholder.

“Usually the phone is ringing off the hook; today it’s not,” said Saul Wilchinsky, a 72-year-old retiree who watched the action at the Crowell Weedon & Co. office in Laguna Hills.

Mostly the investors were talking among themselves, watching the latest price quotations and wondering about the future.

“Today is the start of a recession. I can’t picture people going out and buying cars when this happens. If a guy had $100,000 in the market, he feels he might have lost $30,000 today,” Wilchinsky said.

“This is the worst expected, and you don’t know what to do in the worst expected,” said Erwin Haertling of Mission Viejo.

Haertling said he had moved most of his investment funds out of stocks several weeks ago because he thought the market would be headed down.

“You don’t kill yourself. You don’t go home and beat your wife. But what I have is going down, and I feel bad,” said Wilchinsky, who often spends his days at Crowell Weedon.

At the Schwab office in Laguna Hills, John Sulages of Mission Viejo said he placed an order after the close of trading Monday to buy call options--speculating that the market will soon reverse its slide and increase in value--but he said he was one of few people trading.

“I don’t know what’s going to happen,” Sulages said. “I could make money if the stock goes up. If it goes down, I lose $750. That’s nothing compared to what I’ve seen all day here.”

Telephones at most brokerages were ringing all day as investors wanted to know “how low is low?” said broker Roy Shapiro of Shearson Lehman Brothers in Orange.

Although brokers were urging their customers to remain calm, nerves were tightly wound on Wall Street. A reporter was talking by phone with Benny Lorenzo, a technology analyst at L. F. Rothschild in New York, about a new computer introduced Monday by an Irvine-based company when Lorenzo abruptly terminated the conversation.

“Oh, my God!” he said “IBM’s at $102! Look, I can’t talk now.” And he hung up.

“A lot of widows and orphans are living on IBM stock,” Shapiro said. “Let’s hope a lot of them got out. There is no room for the squeamish now.”

Martha Groves reported from Los Angeles and Eileen Quigley reported from New York. Also contributing to this story were staff writers Keith Bradsher in Los Angeles and James Granelli, John Tighe and David Olmos in Orange County.