Trading on Wall St. Comes to Standstill

World Markets Tumble on News Of Attacks

Terrorist attacks halted financial activities on Wall Street yesterday, sending global markets reeling downward, and the New York Stock Exchange and the Nasdaq Stock Market announced that they will be unable to open today as well.

The paralysis of New York's financial center -- cutting off some of the world's most important trading markets -- sent one of the largest one-day shocks in recent history through global markets. Many analysts said they expect U.S. stocks to drop dramatically whenever trading resumes.

"The markets do not and should not know how to deal with this," said Jeremy Fand, the head of global foreign-exchange strategy at UBS Warburg. "It's unprecedented."

European markets fell sharply, suffering some of their biggest losses since the stock market crash of October 1987, as traders worried that the attack could make already-nervous American consumers wary of spending more, sending the U.S. into a recession.

The German stock market's DAX index fell 8.5 percent, and Britain's FT-SE 100 index slid 5.7 percent.

Japan's Nikkei 225 average was down 6 percent, to 9648.72, falling below 10,000 for the first time since 1984, in afternoon trading today. The morning opening was delayed by 30 minutes. Hong Kong's Hang Seng index plunged nearly 10 percent.

Treasury Secretary Paul H. O'Neill issued a statement from Tokyo, where he is traveling, in an effort to calm markets: "Our nation's financial markets are strong and resilent. In the face of today's tragedy, the financial system functioned extraordinarily well, and I have every confidence that it will continue to do so in the days ahead."

Christopher Bonavico, who manages about $1 billion in assets for Transamerica Corp., expressed similar confidence: "I'd expect there to be an initial sell-off and then confidence eventually rebuilding."

But many analysts and traders were less optimistic. "We're right on the edge of whether it's a worldwide recession or not," said Chuck Hill, research director at First Call/Thomson Financial. "It's not going to take too many things to tip the balance the wrong way."

The attack on the World Trade Center threw Wall Street into chaos yesterday in part because the complex housed several major Wall Street firms, including the heart of the consumer retailing operations of Morgan Stanley Dean Witter, one of the country's largest investment banking firms. About 3,500 people worked in the World Trade Center complex for Morgan Stanley, a spokesman said late yesterday adding that the company did not yet have estimates on casualties.

About 32 brokerage firms were headquartered in the World Trade Center. Keefe, Bruyette & Woods, a major bank securities firm, employed 170 people there. Cantor Fitzgerald, which handles about a quarter of U.S. government bond trading, also had major operations there.

It is unclear whether firms whose offices were destroyed will be able to quickly resume their operations.