U.S. equity markets probably will step aside forthe rest of theweek as the business of America remains recovery.
Officials meeting in New York said stock tradingwould be halteduntil Friday at the earliest and probably until Monday,making it by far thelongest suspension since World War II. With thousandsof people missinganddozens of companies wiped off the map in LowerManhattan, officialsfound thedanger to both personnel and the financial system toogreat to riskanythingsooner.
"We are still in the recovery phase," said RichardGrasso, chairmanofthe
New York Stock Exchange
, following a meeting withthe TreasuryDepartmentand the
Securities and Exchange Commission
. "There arestill peopletrappedin that wreckage and we have to be very careful tomake sure thatnothing wedo in any way interrupts the efforts of the brave menand women who areatthat site."
Trading in U.S. government bonds was to resume at8 a.m. Thursday.
"It is in the best interest of investors that wein essence phaseinto afull capital market operation beginning with thefixed-income marketstomorrow and ultimately with the full operations ofequities by Monday,although it may come as early as Friday," Grasso said.
The Chicago Mercantile Exchange said it willresume trading ininterestrate, foreign exchange and commodity markets and itsNikkei 225 equityindexfutures and options contracts Thursday, though it hadnot made adecision onequity products.
reported that the Chicago BoardOptions Exchangealso will resume business Thursday.
Stock and bond trading was halted shortly afterhijacked commercialjetsbrought down the World Trade Center towers, as marketofficials soughtaresponse that would smack of neither recklessness norfear. Officialsfacehuge moral and physical problems. In addition to thethousands ofpeopleprobably buried in the Twin Towers' rubble, much ofthe world's keyfinancialinfrastructure was destroyed when the buildings weretoppled. Access tothearea is extremely limited and rubble is piled 10 feethigh in someplaces.
Reopening the exchanges is also tantamount torequiring thousandsoftraumatized market participants to return to the sceneof the carnage.
"We've examined issues of communications, power,safety andsoundness ofstructure in Lower Manhattan and certainly access tothose structures,"Grasso said.
Downtown New York was desolate Wednesday asemergency workersbegan toassess the damage. Many of the world's top investmentfirms were laidlow inthe disaster and their first concern remained the fateof theirworkers, notbusiness.
The largest tenant of the World Trade Center'ssouth tower wasMorganStanley, which occupied 22 floors. Chairman PhilipPurcell said duringaninternal broadcast at the firm that "most" of itsemployees had gottenout ofthe tower safely, because they started to evacuate itafter the firstplanehit the north tower, and that the firm was trying toaccount forothers. His firm and others said they were
confident they would retrieve vitalfinancial data.
Other firms stationed in the fallen buildingsinclude ThomsonFinancial,Credit Suisse, Germany's Commerzbank, Bank of America,Deutsche Bank,CantorFitzgerald and Oppenheimer.
Worries arose about the integrity of transactionscarried out bothbeforethe planes hit and after trading resumes. The
saiddiscount-window borrowing spiked up after the attack, althoughit was able toprovideliquidity to banks.
"The financial system performed extraordinarilywell in the face ofyesterday's tragedy, and we have every confidence itwillcontinue to do so in days ahead," said Deputy TreasurySecretary KenDam.
Ken Lewis, the chief executive of Bank of America,said somedepositorsgot nervous, but "nothing extraordinary."
"We've had some instances of customers coming inand asking forlargerthan normal withdrawals," Lewis said. "We've tried tocounsel them onsecurity, but of course if they want money they'reentitled to it andwe giveit to them."
The implications of the disaster for the U.S.economy also were less thanclear. While obviously aggravating recessionary trendssuch asdecliningconsumer confidence and corporate profits, thecatastrophe also ledbanks topromise liberal access to capital. Meanwhile, theprospect of animmediateFederal Reserve rate cut rose. Some said more time wasneeded to sort outtheconfusion.
"Investors would like to have more sense ofwhether the Fed will becutting rates and if the government might be cuttingpersonal andcommercialtax rates," said Jack Shaughnessy, chief strategistfor Advest."Waiting fortwo more days might be best for investors."
While the loss of life and property in New Yorkleft the worldwith adeep sense of despair, economists pointed out that thesadness ofprevioustragedies often translated quickly into renewal asvictimized nationsfoundsolidarity.
"In an economic sense, once you get through theshock andinterruption, there's actually a burst of economicactivity," said Diane Swonk, chief economist of BankOne. "It's veryhard for people to understand but if you look at othercatastrophes, that'swhat'shappened."