The September 11th attack
Wall Street braces for reopening

USA Today

Wall Street plans to reopen this week after its longest shutdown since World War I. But as the world's biggest symbol of capitalism prepares to relaunch itself, millions of investors are bracing for just how the market — and shellshocked Wall Streeters — will fare.

With 75,000 to 125,000 of Wall Street's work force of 180,000 expected to return to work, few anticipate things to be business as usual. Returning to the site of the worst terrorist act in U.S. history is bound to weigh heavily on already fragile psyches. And most market strategists expect some frenzied early selling on negative economic sentiment that had been building long before last Tuesday's tragedy.

"There's huge pressure to keep financial markets continuous since continuity adds to confidence," says Ed Wedbush, president of Wedbush Morgan Securities.

Still, the big unknown is how investors will react when trading resumes. Most individual investors have held their stocks through the brutal 18-month bear market. That's not unusual. In the 1987 stock market crash, 75 percent of the AAII's members didn't do a thing. Of the 25 percent who did do something, most bought stocks, he says.

But no one is quite clear how they may react to what has been an unprecedented attack on the United States and may have shaken consumer confidence.

Investment firms and brokerages are bracing for a wave of calls and trades. Trades that were pending before the market shutdown will have to be dealt with — either executed or called off if investors panic. Companies have called in extra workers to handle the expected deluge of orders and calls. Internet trading firms such as Ameritrade have also bulked up on staffing and are taking steps to ensure their websites continue to hold up from any added volume by investors.

All are urging investors not to panic, to check with brokers or online sites to monitor their investments and market reaction.

If you're worried about the reopening of the stock market, you're not alone. Even before the World Trade Center tragedy, stocks were posting some of their largest and most sustained losses since the 1973-1974 bear market.

Still, some early indications are that the stock market might actually rebound a bit Monday, so making callous bets against stocks could well backfire. European markets rose Thursday. And the World Trade Center attacks could spur the Federal Reserve Board to cut interest rates more, and sooner, than Wall Street expected.

"I wouldn't be surprised to see a half-percentage point cut by Greenspan now," says Kenneth Heebner, manager of CGM Capital Development fund.

Could it get worse? Certainly. The 1973-1974 bear market clawed the market for a 45 percent loss. Those who bought at the top didn't get even for another nine years. Nevertheless, even if this is an epic bear market, we're probably closer to the bottom than the top.