9/11 Attacks Take a Direct Hit on the Economy

Insurers, airlines, and consumer companies will bear the heaviest financial burden.

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In overseas markets, trading resumed shortly after the attack. Japan's Nikkei immediately fell 7 percent, but in London, stocks rallied nearly 3 percent on Wednesday; many other European markets rose. Meanwhile, oil prices shot up to more than $30 a barrel on fears of more Mideast turmoil; scattered reports told of gas prices topping $5 a gallon. "Oil prices are going to go up and stay up, maybe around $33 or $35 a barrel, for the next four to five months," predicts Alfred Goldman, chief market strategist at A. G. Edwards. But oil expert Philip Verleger doubts that the calamity itself—beyond localized dealer price gouging—will add to existing upward pressure on oil prices: "If anything, with the grounding of the airlines and an economic downturn, prices may be lower than otherwise."

Both the Federal Reserve Board and the U.S. Treasury promised to do everything needed to keep the financial system operating. A Fed spokesman reported "substantially elevated" levels of bank borrowing, but no signs of currency shortages or other problems. Across the land, though, major employers such as Humana let employees head home.

For other firms, the day's economic consequences paled in comparison with the tragedy of lost employees. Lisa Raines, senior vice president of government relations for the Cambridge, Mass., biotechnology firm Genzyme, was on American Airlines Flight 77 bound from Dulles to L.A. "I think everybody is stunned," said spokesperson Bo Piela of the firm's 5,000 employees. "But we're trying to carry on."

With Leonard Wiener and Matthew Benjamin