The destruction of New York's World Trade Center near Wall Street shook the world financial markets after the incident of stocks dropped, oil prices surged, and money flooded into Treasury bonds. European markets closed in negative territory, led by insurance stocks and financial houses, as traders reacted to explosions at ground zero, what is considered to be the worst terrorist attack in its history. "This is a major, major act of war and act of terrorism that will have widespread economic consequences," said Jeremy Siegel, professor of finance at the Wharton School of Business. And he was right in many ways. The markets in the USA was closed for a couple days after the incident, bond markets had risen strongly, and equity markets have basically collapsed quickly". After the four-day shutdown of the market, the Federal Reserve had a interest rate cut that provided only a marginal lift for Wall Street before trading began. The Dow Jones industrial average begun trading at 9,605.51, about 500 points above its low for 2001 and the Nasdaq composite index started at 1,695.38, less than half of the 3,835.23 at which it stood a year ago and only 56 points above its low for 2001. Now that the United States is in a recession, which occurred because of the collapse in demand for travel-related services, accompanied by tens of thousands of layoffs. Most economists expect the current recession to be long, with national economic activity reaching a nadir in the first quarter of 2002. The recession we are in now is unusual because of the uncertainty over how consumers and businesses will respond to the terror threats. The economy is suffering and will suffer for a long time while the nations market tries to become stable once again.
