FINANCE
The damage to telecommunications systems, the lack of access to the area (13 million square feet of class-A space were completely destroyed), and the loss of facilities and personnel led to severe disruptions in the operations of stock exchanges. Firms that were responsible for 40% of trading volume were significantly affected by the attack. While government securities markets reopened within two days and operated with low trading volumes, stock and options markets only reopened on September 17, 2001. The Federal Reserve Board in an interagency paper with the Securities Industries Association and the Office of the Comptroller of the Currency describes the events of 09/11 as a “wide-scale disruption”. Immediately after the attack, some of the companies without decentralized backup facilities and with sensitive operations in the area experienced major disturbances in their operations, among other things in the form of trade-processing delays.
Also, we might see that some economic sectors were more affected than others. A great example would be the Airline companies. The September 11th tragedy is considered the worst financial event in the history of commercial airlines. Once the market reopened, the Airline Index fell of 40%. The oil also followed the trend. It has ended it week 14,8% under the price before the incident. However, some sectors went really well. One in particular went well, the arms industry. To show a great example, I have taken a company which some employee died during this disaster and which was the leading one in the sector, Lockheed Martin Corporation. From the 9th of September 2001 to the 26th September 2001 the company shares gained 30%. This might reflect the fear that Americans had after the tragedy and all the support they had in the arms manufacturers.
To take a look to the actual condition of a stock market, it’s great to take a look to indices. One week after the tragedy, the Dow Jones fell of 14,3% of his value. The S&P loses 11.6% and the NASDAQ Comp. 16.1%. If we take a look on a more global perspective with the indices, we can see that the whole global financial world has been touched by the tragedy. All major indices went bearish. It took time to the market to recover from that attack. Within 20 trading days, 6 of the 33 markets (18%) had returned to their pre-attack levels. Within 40 trading days, 21 markets (64%) had returned to their pre-attack levels, and after 60 trading days, 27 markets (82%) had fully rebounded.
We might conclude by saying that the terrorist attack has negatively impact the financial world.
Sources: http://www.newyorkfed.org/research/epr/02v08n2/0211mcan.pdf
http://www.wcfia.harvard.edu/sites/default/files/ChenSiems2004.pdf
http://www2.hmc.edu/~evans/e104l4.pdf
http://igeographer.lib.indstate.edu/pohl.pdf
www.tradingview.com
Also, we might see that some economic sectors were more affected than others. A great example would be the Airline companies. The September 11th tragedy is considered the worst financial event in the history of commercial airlines. Once the market reopened, the Airline Index fell of 40%. The oil also followed the trend. It has ended it week 14,8% under the price before the incident. However, some sectors went really well. One in particular went well, the arms industry. To show a great example, I have taken a company which some employee died during this disaster and which was the leading one in the sector, Lockheed Martin Corporation. From the 9th of September 2001 to the 26th September 2001 the company shares gained 30%. This might reflect the fear that Americans had after the tragedy and all the support they had in the arms manufacturers.
To take a look to the actual condition of a stock market, it’s great to take a look to indices. One week after the tragedy, the Dow Jones fell of 14,3% of his value. The S&P loses 11.6% and the NASDAQ Comp. 16.1%. If we take a look on a more global perspective with the indices, we can see that the whole global financial world has been touched by the tragedy. All major indices went bearish. It took time to the market to recover from that attack. Within 20 trading days, 6 of the 33 markets (18%) had returned to their pre-attack levels. Within 40 trading days, 21 markets (64%) had returned to their pre-attack levels, and after 60 trading days, 27 markets (82%) had fully rebounded.
We might conclude by saying that the terrorist attack has negatively impact the financial world.
Sources: http://www.newyorkfed.org/research/epr/02v08n2/0211mcan.pdf
http://www.wcfia.harvard.edu/sites/default/files/ChenSiems2004.pdf
http://www2.hmc.edu/~evans/e104l4.pdf
http://igeographer.lib.indstate.edu/pohl.pdf
www.tradingview.com