Updated from 8:56 a.m. EDT
Global markets reacted positively Thursday to news of international support for U.S. retaliation against Tuesday's terrorist attacks.
Markets in Europe and across the Pacific Rim posted modest gains, although trading remains choppy and somewhat tentative in the wake of one of the most devastating terrorist attacks in history. Traders, who still appeared somewhat stunned by Tuesday's events, took in stride Thursday's news that the European Central Bank held interest rates steady.
In afternoon trading in Europe, all eyes were on the U.S., where bond trading resumed after a two-day hiatus. Bonds surged at the open, but gains moderated as trading continued. While brisk, trading appeared orderly, providing additional comfort to global markets. Futures markets are also suggesting the potential of more rate cuts by the
, possibly even before the next scheduled meeting in early October.
At London's close, the
posted a gain of 61.50, or 1.2%, to 4944, extending Wednesday's 2.9% gain.
Continental markets followed London's lead with moderate gains. In Frankfurt, the
moved 0.3% higher to 4348, while in Paris, the
was largely unchanged at 4114.
Many insurance issues recovered a portion of Wednesday's losses, a result of concern over potential claims from the U.S. disaster. Near the close,
gained more than 10%, and
moved higher by 5%. Both are large reinsurance concerns with operations in the U.S.
was up 1.3%.
On Wednesday, analysts began to estimate the value of potential claims from the World Trade Center disaster and other calamities. Some estimates push $20 billion or more. While the claims are spread across many companies, reinsurance companies, which underwrite major catastrophe policies, are subject to the largest claims.
Chairman Warren Buffett said Wednesday that his company is likely to pay 3% to 5% of all claims related to the disaster, although he did not estimate the total claim value. Berkshire owns General Re, a large reinsurer, and several other insurance companies.
Airlines were mixed into the close.
gained more than 2%, while
dropped another 5.8%. Germany's
The European Central Bank met Thursday and decided, as expected, to leave rates unchanged. The ECB benchmark is currently 4.25%.
Trading in U.S. stocks on foreign markets was suspended again Thursday and will likely remain halted until U.S. exchanges reopen.
Asia Regains Footing
Markets in the Pacific Rim regained some ground Thursday, after a strong selloff in reaction to the disasters at the World Trade Center and Pentagon.
In Tokyo, the
finished largely unchanged, up nearly 3 to 9613. The market experienced wild swings -- nearly 250 points -- in early trading as shorts scurried to cover, but a lack of follow-through buying pushed the market lower. By midday, the market had settled at prior-day levels and traded listlessly to the close. On Wednesday, the Nikkei lost 6.6% to close below the 10,000 level for the first time since 1984.
Auto-company stocks remained weak for a second straight day, however, on fears of deteriorating U.S. and global economies.
dropped 5.6%, while
lost 5.2%. In technology,
also continued its descent, losing 5.3%.
In Hong Kong, the
gained 0.8% to close at 9569.
Other Asia-Pacific markets posted solid gains. Among the standouts, the Korean
gained 5%. In New Zealand, the
NZ Top 40
closed up 1.1% to 1894, while in Singapore, the
slipped 0.8% to 1439. In Australia, the
gained 0.6% to 3069.
Pan-Asia markets that were closed Wednesday took their lumps on Thursday. In Taiwan, the benchmark index lost 5.4%, while in Malaysia, the
While global markets are slowly regaining their footing, one firm reminded traders that the acts of terror against the U.S. created new, uncharted territory. Merrill Lynch Europe issued a report Thursday morning suggesting there is "no roadmap" for the current situation. They suggested that oil prices and the U.S. consumer would likely hold clues to the future direction of global markets.
Oil Steadies, Gold Weak
Crude prices steadied after significant volatility over the past two sessions. Oil spiked Tuesday on fears of increasing tensions in the Middle East. Prices slumped after the U.S. chose to be deliberate in its response to Tuesday's terror. In London, the October contract for Brent Crude gained 8 cents to $28.10 per barrel after early-morning declines. Gold also dropped slightly to $278.50 an ounce, down from $279.
The dollar was largely unchanged against the euro and other European currencies as trading remained thin.