As Wall Street prepared to reopen, President George W. Bush and others tried to keep up investors' spirits amid fears last week's terrorist attacks against the United States would further shake a weakened global economy.
Some of America's biggest brand names announced they would buy back shares in their own companies when trading resumed Monday on the New York Stock Exchange for the first time since Tuesday, when two hijacked airlines smashed into the nearby World Trade Center, collapsing its twin towers.
In middle America, messages flying across the Internet urged "buy, buy, buy" to keep the US economy from collapsing as well. Warren Buffett, one of America's biggest single investors in the world's most important stock market and one who has the most to lose if it goes into free-fall, said bluntly: "I won't be selling."
Yet some doomsayers in the financial industry believed the market was opening too soon and predicted that the Dow Jones Industrial Average index — the barometer of America's economic health — would plummet in the opening minutes.
Returning to Washington from Camp David, President George W. Bush expressed his "great faith in the resiliency of the economy. "No question about it, this incident affected our economy," he said. "But the markets open tomorrow, people go back to work, and we'll show the world."
Drug manufacturer Pfizer, one of the biggest companies in the United States, set the tone of corporate America with a pledge to go on with the five-billion dollar stock buyback program it launched in June as the nation's economy was faltering.
John Chambers, president and chief executive officer of computer network company Cisco Systems, which is buying back up to three billion dollars of its own stock over the next two years, said this was because his company has "tremendous confidence in the financial systems of our country".
Buffett, reputedly the second richest man in the country and head of the Berkshire Hathaway group, told CBS television there was no reason to sell "a piece of American business you were happy with last week. If prices fall there are some things I might buy," he added.
He was echoed by Jack Welch, who has stepped down from two decades at the helm of America's biggest company, General Electric. "Where else would you go with your money?" Welch asked.
But Buffett also conceded that Berkshire Hathaway, whose empire extends to re-insurance, would have to pay out a "great deal of money — more than with any other catastrophe" — following the destruction of the World Trade Center that left some 5,000 people missing and presumed dead.
Financial analysts said they would be closely watching what the big guns of the industry will do Monday — companies like Merrill Lynch, Goldman Sachs and also Morgan Stanley, most of whose 3,500 employees in the World Trade Center were lucky to escape. "You're damn right this firm is going to come back," Merrill Lynch chief executive David Komansky said in a statement to The New York Times. "This place did not get to be what it is by having a bunch of pussycats here."
Equally defiant messages shot across the chat rooms and bulletin boards of the Internet. "I am a small investor but come Monday I am going to buy my favorite stocks," urged one user. "I urge you all to buy or hold for long term and make these terrorist backers run for cover," said another.
The Dow Jones index stood at 9605.51 before Tuesday's terrorist strikes forced its longest closure since World War I. This already represents a fall of nearly 11 percent for the year, and some analysts fear it could fall as much again in early trading, especially if investors bail out of shares in airlines, insurance and other companies hit hard by the attacks.
European markets showed they were preparing for the worst with London shares down six per cent over the past week to their lowest level in nearly three years. "Nine thousand, eight thousand, seven thousand — the bottom's the limit," said one local broker on condition of anonymity for fear of being branded a panic monger.
Treasury Secretary Paul O'Neill, New York Mayor Rudy Giuliani, Senator Hillary Clinton and representatives of the city's police and fire services will be among those Monday joining the time-honored tradition of ringing the bell to mark the start of trade on the New York exchange. Monday's bell also will honor the victims of history's worst terrorist attack. ― (AFP, Riyadh)
by Ian Pedley
© Agence France Presse 2001
© 2001 Mena Report (www.menareport.com)
