"This will be a monumental struggle of good versus evil. But good will prevail." -- President George W. Bush

U.S. Stock Markets Still Closed

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By Tom Jacobs (TMF Tom9)
September 13, 2001

The United States and the world continue to mourn for and provide relief to those affected by Tuesday's tragic attacks on New York City's World Trade Center and the Pentagon in Washington.

At President Bush's meeting yesterday with his national security team, he told the nation that Tuesday's attacks were "acts of war." He added, "The United States of America will use all our resources to conquer this enemy. We will rally the world.... This battle will take time and resolve. But make no mistake about it: We will win."

The president later in the day toured the Pentagon and reviewed the damage, now estimated to include 150-200 dead. Bush thanked Americans for their "contributions of love and their willingness to help in any way they can." Pentagon workers draped a huge American flag over the building's side.

The first U.S. financial market to reopen was the bond market at 8:00 a.m. today, to be followed by the Chicago Board of Trade. New York Stock Exchange Chairman Richard Grasso said trading will begin as early as Friday but no later than Monday. Exchanges are said to be checking communications systems to ensure that firms will be able to trade on an equal footing. The three-day closure so far is the longest since World War I.

Reuters reported that central banks worldwide have added $120 billion to the financial system to avoid any bank crisis. In the U.S., the Federal Reserve added $38.25 billion through buying government bonds, well above the few billion it buys or sells in an average day. The European Central Bank met this morning and decided to hold interest rates steady, but there is speculation that the Fed may cut rates again before its October meeting.

After initially dropping dramatically on Tuesday, European stocks have since posted gains. Bloomberg reported that stock markets in the U.K., Germany, and France dropped an average of 5.7% on Tuesday, but have climbed 4% in the next two days. In Asia, results are mixed. South Korean stocks, which lost 12% yesterday, gained 5% today. Japan's Nikkei index lost 6.6% yesterday -- scraping 17-year lows -- and stayed flat today. The stock markets in Taiwan, Thailand, and Malaysia went lower.

News to Go

New York airports opened this morning for the limited purpose of receiving incoming flights. No time has been set for resumption of normal air operations nationally.

Financial institutions operating in the World Trade Center's two towers scramble to evaluate the damage. Cantor Fitzgerald, a privately held government bond firm, and its recently spun-off eSpeed (Nasdaq: ESPD) electronic trade service opened for business as they tried to account for hundreds of employees that worked in offices on the top floors of the second tower. Bloomberg reports that some financial firms have offered office space to affected competitors.

U.S. airlines face an estimated combined loss of $270 million a day with planes on the ground. Transportation Secretary Norman Minetta has informed the country that if and when airports are reopened for outbound commercial traffic, there will be enhanced security measures. Notably, people accompanying or meeting passengers will not be allowed beyond the security checkpoints' metal detectors.   

Attention naturally turns to insurers and the claims they may face from the tragedy. Early estimates are that they could pay out as much as $10 billion to $15 billion. In a press release yesterday, Berkshire Hathaway (NYSE: BRK.A) estimated that its share of losses will be 3%-5%.

The Motley Fool has collected some resources for those interested in helping relief efforts. 

Tom Jacobs (TMF Tom9) expresses his sympathies and support to those whose friends and family are affected by the attacks and relief efforts. The Motley Fool has a disclosure policy.

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