The attack on President Reagan yesterday caused an immediate drop in the value of the dollar in financial markets, but Wall Street's major stock exchanges closed within minutes of news reports that the president had been wounded, preventing any large-scale reaction.
"There was no sign of any panic or disorder in any of the markets," said Thomas Sloan, senior vice president of the Federal Reserve Bank of New York.
The stock markets had been moving upward in an apparent rally, with the Dow Jones industrial average up 6 points for the day at 2:30 p.m., when news of the assassination attempt reached Wall Street. The initial reports said that President Reagan had not been hit. When news bulletins disclosed he had been shot in the side and had been taken to a hospital, the markets closed down quickly.
Trading on the New York and American stock exchanges stopped shortly after 3:17 p.m. (EST). The National Association of Securities Dealers also halted trading in over-the-counter stocks, and regional exchanges across the country did the same. Some normal market tables from trading yesterday were not available for today's newspaper editions, including over-the-counter stocks.
Analysts said some "scared money" got out of the market around 2:30 p.m., but most investors did not have a chance to react before trading was halted.
The final reading yesterday on the Dow Jones average of 30 industrial stocks was 992.16, down 2.62 points. The New York Stock Exchange composite index dropped 0.23 point to 77.36, and the price of an average share decreased 10 cents, in a trading volume of 33,554,100 shares, compared with 53,093,100 Friday. The American Stock Exchange Index dropped 1.22 points to 356.65 and the average price of a share fell 7 cents.
The board of governors of the New York Stock Exchange will hold a special meeting at 9 a.m. today to determine whether to resume trading at the regular time of 10 a.m.
Canadian stock exchanges halted trading as well in response to the assassination attempt and had no word on trading plans for today. A spokesmen for the Montreal Stock Exchange said, "we'll wait and see what happens to President Reagan and what New York does."
The reaction in currency markets was sharper. The dollar had been declining during the day against European currencies for a variety of reasons, including the fast-changing developments in Poland, when the attack on the president occurred.
The dollar dropped further, then stablized as traders waited to learn more about the president's conditions. Joseph Spendley, senior vice president of Irving Trust Co., and the head of its currency trading department, said he is certain that the Federal Reserve began buying dollars immediately after the attack to prevent the possibility of a collapse, but there was little trading.
"I believe the communication between the Federal Reserve and Treasury is very fast," said Spendley. Closing reports on the major European currencies showed slight gains against the dollar. The dollar was selling for 2.06 to 2.08 German marks yesterday, down from 2.11 on Friday and was worth 4.85 to 4.95 French francs compared with Friday's 4.9950 figure. The pound rose slightly in value against the dollar to a $2.2550 to $2.2650 range compared with Friday's closing figure of $2.23.
Gold, which plummeted earlier yesterday on news that Portland's Solidarity Union had called off a nationwide strike scheduled for today, moved upward briefly in New York after the attack on Reagan, but then slipped back. Gold, a traditional refuge for investors during crises, girated rapidly as the reports about the president's condition changed during the afternoon.
Before the shooting, gold was quoted in New York at a price of $512.50 yesterday, down sharply from Friday's $532 figure. It jumped to $521 after the president was reported wounded, then eased off to $514 "as things calmed down," said a trader for the James L. Sinclair precious metals brokerage firm. The Comex settlement price was $512.10, down from Friday's $529.30.
The reaction in financial markets was dampened by the overriding concern over the Polish situation, several traders indicated. "Dealing on the foreign exchanges was very restricted Monday as operators kept commitments down to a minimum pending the outcome of crucial talks aimed at averting the Polish national strike," a dealer for Barclay's Bank International said.
The rapid closing of the stock exchanges was the first time these markets had been shut down in the response to a news development since Jan. 25, 1973, for the funeral of former President Lyndon Johnson.
The markets was closed early on Friday, Nov. 23, 1963, the day President John F. Kennedy was shot to death in Dallas, but not before the Dow Jones industrial average had plunged 21.16 points. The market remained closed the following Monday, a national day of mourning, and reopened the next day with a hugh rally, the Dow industrial average soaring 32.03 points in what was interpreted as a vote of confidence in President Johnson.