America sat in front of television sets last Tuesday, unable to comprehend what it was seeing. It was unbelievable that the World Trade Center, symbol of financial freedom, could have disappeared forever. Many felt helpless and hopeless. There was nothing we could do to prevent the tragedy that was unfolding before our very eyes.

Gradually, we realized that we are not helpless or hopeless. There is something -- many things -- we can do. We gave blood. We sent money to the Red Cross. Many volunteered their time and risked their safety to assist in rescue and cleanup efforts. We acted selflessly according to our ability and means, proud to say that we were Americans, that vicious madmen would not diminish us.

Corporations come through
That is true of corporations as well as individuals. DaimlerChrysler (NYSE: DCX) contributed $10 million to the relief efforts. Microsoft (Nasdaq: MSFT) went a step further, donating $10 million itself, but also offering to match up to $12,000 of each of its employees' donations. Considering the number of Microsoft Millionaires out there, the number of full matches could be big. Pfizer (NYSE: PFE), too, gave $10 million and offered to match employee contributions.

The companies in the Rule Breaker portfolio did what they could to help:

  • AOL Time Warner (NYSE: AOL), in addition to providing around-the-clock coverage to the world through its CNN subsidiary, offered to assist affected companies with equipment and computer services. It also provided its users with channels for donations, raising $12.5 million for various charities.
  • (Nasdaq: AMZN) quickly converted its homepage into a link to the American Red Cross Disaster Relief Fund. As of this morning, Amazon had redirected $6 million to the cause.
  • Starbucks (Nasdaq: SBUX) established "Starbucks Cares," which collects donations for the September 11th Fund. The company kicked off the giving with a $1 million gift.
  • eBay (Nasdaq: EBAY) reacted quickly to an unusual situation. Shortly after the incident, some eBay users had placed debris from the crashes for sale. That same day, out of respect for the victims and their families, eBay shut down not only those auctions, but all auctions of World Trade Center and Pentagon memorabilia. eBay also redirected visitors to the September 11th Fund and the New York Fire 9-11 Fund.

Damage to the economy
It is all the more noteworthy that these corporations gave just when they were hurting the most. Today the market begins to assess the economic effects of the terrorist attacks beyond Ground Zero, as the stock exchanges reopen for the first time since last Tuesday. It had already not been a good summer for American business, and this disaster did not help matters. Commerce came to a grinding halt last week, as people spent time with their families and their television sets rather than shopping. The scars will show in third-quarter earnings.

Investors need to assess the damage to each of their stocks, keeping in mind that this is an extraordinary event. We would make a mistake if we assigned too much importance to it. There is real damage, however, to companies that were not directly affected by the crashes. 

  • AOL provided comprehensive news of the disaster, which is not cheap, and it did it for free. Along with other television networks, AOL forfeited $100 million per day in advertising by airing no commercials during the coverage. The week of special coverage has already chopped 5% off of advertising revenue, and it will continue.
  • Starbucks closed its North American stores on the day of the attack, and had many of its airport stores and kiosks closed by the FAA for three days. This downturn came after weak comparable-store sales growth of 4% and 1% in July and August, respectively. An Adams Harkness & Hill analyst cut his earnings-per-share estimate from $0.14 to $0.13 because of the lost sales and the continued negative effect, particularly at travel locations. Starbucks is bullish about its own position, however: It has announced that it will buy back $60 million worth of its own stock.
  • Amazon and eBay, like Starbucks, endured a week of lower than normal traffic. People who came to the site were -- rightly -- diverted to relief efforts rather than directed to shopping. The impact of those days off has yet to be measured precisely, but I wouldn't be surprised to find that Amazon lost $25 million in sales and eBay saw $75 million worth of transactions passed up. That is in addition to the general slowdown in spending that was already going on, and the redirection of discretionary spending to relief efforts in the near future.

These are short-term concerns, however. This quarter won't be pretty for most companies, but they will recover. The sum of a company's future cash flows includes only a small amount contributed by the coming earnings announcement. It is important not to place too much emphasis on the current state of things. We care more about the long-term health and competitive position of our companies, and this has not changed materially. They remain strong and intact. So too does America. We are not selling.

Brian Lund is a co-manager of the Rule Breaker portfolio. Of the companies mentioned, he owns shares of eBay. The Motley Fool is investors writing for investors.