Wall Street on Alert

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Wall Street was put on alert yesterday when the U.S. government raised the terror alert for parts of New York City, Newark, N.J., and Washington, D.C., to orange, or "high."

Secretary of Homeland Security Tom Ridge cited "unusually specific" intelligence that pointed to possible car or truck bomb attacks at the New York Stock Exchange (NYSE) and Citigroup (NYSE: C) buildings in New York, the Prudential Financial (NYSE: PRU) Center in Newark, and the International Monetary Fund and World Bank headquarters in Washington, D.C.

The Washington Post quoted one unidentified Bush administration official who recounted eerie details of how would-be terrorists have scouted the daily traffic of pedestrians outside targeted buildings as well as potential escape routes through sewers, locations of fire and police stations, and whether or not on-site security guards carry weapons.

It's enough to make one want to stay home and duct tape themselves in a closet, but government officials in New York and Washington said commuters should go about their business as usual, keeping a wary eye out for any suspicious activity.

There was no time frame given for the potential attacks, and pundits speculated that law enforcement officials could be thwarting them just by announcing that suspected targets would be on high alert.

Regardless, as investors, we're just going to have to get used to al Qaeda targeting our financial institutions. Ridge said any attacks "would not undermine the greatest economy in the world" and would largely be "iconic" in their nature. That doesn't make them any less frightening or abate the danger for loss of life. But while investors should always be ready for disruption in the post-9/11 world, panic should not be one of our responses.

Stay the course. The market may get spooked in the short-term, but don't let that alter your regular investing plans. Our financial institutions may be under alert, but your portfolio doesn't have to be.