US stocks: Markets may stay closed until Monday

10.00 am

NEW YORK - United States markets could remain closed until Monday, six days after a horrifying air attack destroyed the World Trade Center in the heart of New York's financial district and paralysed exchanges.

Subways and trains on Wednesday avoided the financial district in lower Manhattan, where emergency workers picked through the rubble of the destroyed 110-story twin towers in search of thousands feared dead. New Yorkers scoured newspapers detailing the gruesome attacks, talked to colleagues or sat silent. Many financial pros took the day off.

"It really causes you to step back and think about life and what is important, but eventually we focus on getting back to normalcy," said Grant Babyak, portfolio manager at TimesSquare Capital Management, in midtown Manhattan.

Normalcy is a bear market these days, and investors are bracing for more stock declines when trading reopens. The broad US market gauge, the Standard & Poor's index, already fell to near-three lows last Friday after news US employment had shot up.

The US Securities and Exchange Commission, the nation's top securities watchdog, and the two largest US exchanges, the New York Stock Exchange and Nasdaq, scheduled a 3 pm news conference on Wednesday. The SEC earlier had indicated markets would reopen on Thursday.

"It is our hope and expectation that the markets will resume operation tomorrow," SEC Chairman Harvey Pitt said.

Some investors had doubts a speedy resumption would be possible after hijacked airplanes on Tuesday leveled lower Manhattan's twin towers and ravaged a portion of the Pentagon outside of Washington, DC.

"You want to believe that we can get back to a normal routine as soon as possible in the financial markets," said Art Hogan, chief market analyst at brokerage Jefferies & Co. "But bear in mind, just to use an analogy, Oklahoma City took a week to get everything going after its bombing and this is probably 10 times worse in terms of physical damage."

In Oklahoma City, a car bomb gutted the Alfred P. Murrah Federal Building and killed 168 people in 1995.

Thousands were feared dead after Tuesday's attacks as emergency crews picked through the rubble and the world watched in awe.

Global markets, which usually take their cue from the performance of the US markets, dwelt on the televised images of collapsing towers, shell-shocked New Yorkers, a rubble-strewn financial district and a crippled Pentagon.

The attacks rocked global markets. The Euro Stoxx 50 a benchmark of large European companies lost more than 4 per cent on Tuesday but rebounded slightly to end up 1.3 per cent on Wednesday.

Asia's markets, which on Wednesday for the first time digested the news, fell across the board. Japan's Nikkei average tumbled below the psychological support of 10,000 for the first time in 17 years.

Oil and gold prices, often seen as safehavens in times of financial distress, on Wednesday declined slightly after big rallies on Tuesday.

"The revival of the European market today is a good sign of there being stability when the US markets open up." said Rick Meckler, senior managing director at investment firm Liberty View. "As it stands now, we just think it will be opening lower, but we doubt it will be anything catastrophic in terms of the markets."

For many investors, some still searching for friends and co-workers, the stock market took second place for once.

"Our world seems pretty prosaic compared to this," said Milton Ezrati, Lord Abbett & Co.'s economist and strategist.

Just blocks away from where the twin towers had stood until Tuesday morning, the New York Stock Exchange sat dormant in a deserted, rubble-strewn Wall Street district.

Ordinarily, the exchange, the world's biggest equity market, would be gearing up for another day of trading tens of billions of dollars in US and international stocks.

Even a trading halt for any reason during the day is a rare event at the NYSE, which has kept its legendary floor open amid blizzards and hurricane scares. The Nasdaq, the No. 2 US stock market, and the American Stock Exchange also remained shut for the second day in a row.

"It's not inconceivable at all that the markets could open tomorrow despite the physical damage to downtown New York," Ezrati said. "I think the NYSE probably has disaster scenarios so they are able to conduct business. Things might move a little more slowly, but I think they could trade."

The world's leading investment banks and brokerages said early on Wednesday they were trying to account for their New York employees after the attack. Morgan Stanley was the World Trade Center's largest tenant, although its headquarters are in mid-town Manhattan.

Treasury prices were frozen in mid-morning trade on Tuesday after the Bond Market Association recommended the market shut down. The market remained shut on Wednesday.

The New York Board of Trade, which trades agricultural commodity futures and is based in the World Trade Center complex, was buried under the rubble and did not expect to reopen trading until Monday at its back-up facility in Long Island City, New York.

"You can see shots of it with significant damage," said Chairman Charles Falk. "If so, it's probably history. God knows how long it will be to restore it."

- REUTERS

The New Zealand Herald will publish another special edition this morning with extensive coverage of the terrorist attacks in the USA. Look for your copy on sale throughout the Herald circulation area at noon.

Full coverage: Terror in America

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The fatal flights

Emergency telephone numbers for friends and family of victims and survivors

These numbers are valid for calls from within New Zealand, but may be overloaded at the moment.

United Airlines: 0168 1800 932 8555

American Airlines: 0168 1800 245 0999

NZ Ministry of Foreign Affairs and Trade: 0800 872 111

US Embassy in Wellington (recorded info): 04 472 2068

Online database for friends and family of victims and survivors

Air New Zealand flights affected

Air NZ flight information: 0800 737-000.