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Archive for Thursday, September 13, 2001

Officials aim to reopen markets Friday

Bond trading to resume today; Wall Street leaders mulling options

September 13, 2001

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— The nation's stock markets won't reopen before Friday as New York's financial district struggles to recover from a terrorist attack that devastated the World Trade Center.

Securities and Exchange Commission Chairman Harvey Pitt had said earlier that he believed the markets would be ready to open today, according to SEC spokesman John Heine.

But New York Stock Exchange Chairman Richard Grasso said at a Wednesday afternoon news conference that pending a meeting today, the stock markets hoped to resume trading Friday. The opening would be no later than Monday, he said. The meeting will include officials of financial markets, big Wall Street firms and the SEC.

Treasury Undersecretary Peter Fisherence said government bond trading would resume this morning. Earlier, officials of the Chicago Board of Trade and Chicago Mercantile Exchange, where futures contracts are traded, said they would resume trading today.

Also today, the Kansas City Board of Trade will resume trading of wheat futures and option contracts.

The shutdown on the NYSE, the nation's oldest exchange, already was the longest since the market closed for two days at the end of World War II. The NYSE's longest closing was nearly four months during World War I.

Grasso said securities officials wanted to avoid doing anything that would interrupt the recovery operation at the devastated trade center site, several blocks from the NYSE.

"Our first and primary concern is restoring the public's confidence that this marketplace ... will be up and functioning ? and no one can interrupt that resolve," he said.

The trade center is a few blocks from the NYSE in the Financial District, home to dozens of investment houses and brokerages. Its twin 110-story towers, among the world's tallest skyscrapers, collapsed Tuesday after two hijacked jetliners crashed into them, scattering debris throughout the area.

The New York Mercantile Exchange, where energy futures are traded, is in the nearby World Financial Center, which was not directly hit in the plane assault.

Overseas, key European stock markets ended higher in volatile trading Wednesday after Asian shares plunged on fears the terrorist attacks could deal a severe blow to the ailing U.S. and Japanese economies.

The dollar stabilized against other major currencies, while gold prices retreated.

Still, it was hard to assess how U.S. investors would react when trading started again.

"This attack was an overt attempt to disrupt the financial system, but a lot of how the U.S. market reacts will probably depend on how long it stays shut," said Richard Dickson, technical analyst at Hilliard Lyons. If the shutdown is brief, there might be some initial selling when trading resumed, Dickson said, but "things would stabilize pretty quickly."

Longer term, other economists worried that billions of dollars in lost business because of the attacks could further jeopardize companies already struggling and tip the fragile U.S. economy into recession. More than $100 billion worth of trades are conducted every day in the United States, according to the Securities Industry Assn.

The Federal Reserve said it was ready to provide additional money to banks if needed, a step designed to reassure Americans that the nation's financial system was still working.

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