WASHINGTON – Federal authorities lowered the terror alert status for areas around financial institutions in New York, Washington and Newark, N.J., saying yesterday that additional security precautions had reduced the threat.

Lowering the threat level from orange to yellow – the midpoint on the government’s five-level terror warning system – comes three months after the alert was raised because of concerns the institutions and the areas around them could be Al Qaeda targets. Yellow is “elevated,” while orange is considered a “high” threat of attack.

Homeland Security Deputy Secretary James Loy said security improvements made since the threat was raised August 1 allowed the government to make the change. However, he warned the threat of an Al Qaeda attack remains serious.

“We are as concerned today as we were a month ago,” Mr. Loy said. “My sense is this particular enemy will pick their time and pick their place.”

Police in Washington said they would remove vehicle checkpoints near the Capitol that went up after the threat was raised and had become a source of frustration for area residents.

The city curtailed round-the-clock operations at the Joint Operations Center where local and federal law enforcement agencies coordinate emergency responses during unusual events.

But New York City officials chose to keep the city at orange, where it has been since the September 11, 2001, attacks.

Last summer, Homeland Security officials raised the threat level for areas surrounding the Citigroup Center building and the New York Stock Exchange in New York; the International Monetary Fund and World Bank buildings in Washington; and Prudential Financial Inc.’s headquarters in Newark.

The move came after federal officials said they had intelligence indicating Al Qaeda had conducted extensive surveillance of the buildings. Counter terror officials later acknowledged that much of the intelligence was at least several years old. They defended their decision to raise the alert because of Al Qaeda’s record of extensive planning and plotting. The rest of the nation remained at yellow, the current status.

Robert Selsam, senior vice president of Boston Properties, manager of Citigroup’s 59-story tower in midtown Manhattan, called the lowered terror alert “obviously welcome news.” But he said security enhancements such as an X-ray machine at the main entrance would remain in place.

At the International Monetary Fund and the World Bank, officials refused to discuss how the change would alter security arrangements around their headquarters buildings, located only a few blocks from the White House.

“We will remain vigilant and we shall continue to take the measures we believe are necessary to ensure the protection of all World Bank staff,” World Bank press spokesman Damian Milverton said.

Rafael Camargo, a Citigroup employee, took some relief in the lowering of the terror threat but said he wouldn’t change his routine. “I just hope they’re right,” he said.

During the weeks leading up to the election Bush administration officials repeatedly warned that Al Qaeda could mount an attack aimed at disrupting the democratic process. They cited March train bombings in Madrid linked to Al Qaeda just prior to Spain’s elections. Spanish voters elected new leadership.

The Homeland Security Department faced criticism throughout the year that terror warnings were designed to boost support for the Bush administration during an election year. Mr. Loy said politics did not pay a role in any decisions to raise or lower the threat level.

In explaining the decision to lower the threat level for the financial institutions, Mr. Loy said government officials and private organizations that oversee the affected buildings worked for the past three months to boost security and preparedness. That included drills to test cyber-security backup systems and efforts to secure parking or other features of the buildings that the Al Qaeda reconnaissance had noted.

When the nation is at heightened alert, state and local security officials take added precautions such as adding patrols at ports and increasing undercover officers monitoring potentially attractive targets. The announcement signals to local authorities that they can scale back some of the extra security personnel assigned to specific sites.