Charles Schwab, the number one online stock and discount brokerage, has said its profits for the quarter fell by half in wake of the terror attacks on the US.

Schwab's profits were also hurt by the continuing slide in stock values amid an economic slowdown in the US, which many fear has fallen into recession after hijackers smashed aeroplanes into the World Trade Center and the Pentagon last month.

"The uncertainty surrounding the duration and severity of the current economic slowdown has only increased following the horrific events of 11 September," the firm's chairman and co-chief executive, Charles Schwab, said in a statement.

For the three months ending 30 September, the brokerage earned $81m (�56m), or 6 cents a share, compared with profits of $165m (�114m), or 12 cents a share, for the same period a year ago.

Despite the drop, the firm outperformed some analyst expectations, which predicted it would make 5 cents a share for the quarter.

Stock-market woes

The flailing US stock market has contributed mightily to Schwab's woes.

The Nasdaq Composite Index, a measure of the stocks traded on the Nasdaq market, has fallen about 30% for the year.

Meanwhile blue-chip stocks, as listed on the Dow Jones Industrial Average, have fallen by about 15%.

In that investing climate, investors have elected to hold on to cash rather than investing it in a downward-trending stock market.

Schwab, which derives 30% of its profits from brokerage commissions, has been making fewer and fewer trades.

The firm has had to counter reduced revenue by eliminating employees and cutting other costs.

In August, the firm said it would axe 2,400 posts on top of the 3,400 cuts announced in March.