Wall Street was poised to open Monday, September 24, amid fear of a continuing downward spiral, after the worst week of trading since the Great Depression cast gloom over stocks in other countries.
The New York stock market lost $1.4 trillion in five successive days of sharp drops last week, in the wake of the September 11 terror attacks on US targets. Lawmakers and experts are predicting that the US economy ultimately will rebound, but said the situation was likely to get worse before it gets better.
"We are going to go through a dislocation, not unlike in the marketplace, not unlike we did after Kuwait, when we had a GDP (gross domestic product) that was down three percent or four percent, or when Ronald Reagan took over in 1981, and we had a negative five percent," said Jack Welch, the recently-retired chief executive of General Electric, speaking on Fox News Sunday.
In particular, aviation, tourism and related service industries were crushed on Wall Street last week, when the benchmark Dow Jones industrial average plummeted 14.3 percent. Shares nose-dived last Monday when the markets reopened after being shuttered for four days following the attacks.
World stock markets are poised for another week of volatility and uncertainty, under the shadow of recession and fears of a new world war in the wake of the September 11 terrorist attacks on the United States, economists say. "The markets will focus on the three R's: risk, recession and reprisals," strategists at the French bank BNP Paribas said.
They said stock prices had plummeted to "clearance levels", as buyers take account of an economic slowdown, the horrors seen in New York and Washington and ensuing fears this will lead to a new world war. "Then, if there is no world war, we have to buy everything," said Gerard-Augustin Normand, head of the financial management company Richelieu Finance. Nordine Naam, chief economist at Caisses D'Epargne, warned against a blind rush for profits from current low prices, as a market rebound could also lead to a rush to sell.
Traders now are hopeful that a round of intensive buying by bargain helps propel the stock market higher and US lawmakers on Sunday urged American consumers to do their part to help the recovery.
"If you want to do an act of patriotism, if you were going to buy a car, go out and buy that car. If you were going to do some trip, go do that trip," Democratic Senator Bob Graham said on CBS television's Face the Nation program.
However, the London-based Center for Economics and Business Research predicted in a report Monday that the terrorist blitz on the United States would result in a fall of 2.2 percent in GDP worldwide next year. ― (AFP, Washington)
© Agence France Presse 2001
© 2001 Mena Report (www.menareport.com)
