The bell tolled, and the stock market reopened Monday for the first time since Tuesday’s attacks.
The New York Stock Exchange is located close to the fallen World Trade Center, which housed many investment firms. The destruction of the twin towers led to a three-business-day halt of all stock trading in the United States.
On Monday, traders were eager to return to work and to resume a normal life.
“I want to get back to my daily routine,” said Share Crofton, a stock broker at Thornwater Co. “I want to move forward. The opening of the stock exchange is symbolic. It shows the strength of Americans pulling together.”
A drop in stocks was expected. By the final bell, the Dow Jones industrial average had posted a record drop.
The Dow plummeted 684.81 points, or 7.13 percent, and posted its lowest closing since 1998.
The Nasdaq composite index dropped 6.9 percent, and Standard & Poor’s 500-stock index fell 4.9 percent.
In an attempt to save the market, the Federal Reserve Board cut interest rates by half a percentage point. Rates now stand at 3 percent. But this action did little to salvage the market, though no one knows how much farther the market would have fallen had the rates remained unchanged.
Panic ensued, and investors began a sell-off that resulted in the stock market’s drop.
Realizing the impact of a huge sell-off, some opted not to sell, despite the drop.
“Basically, I’m going to hold pat,” said Don Stern, an art dealer from Highland Park, N.J. “Call it patriotism or whatever. I don’t like panic reactions to things, and I also think it wouldn’t be good for the country to sell.”
Unfortunately for the market, Stern was one of few who did not sell, and the market felt the effects.
Although panic gripped the American people, traders expected a fall and were not worried.
“Even our competitors are our friends,” said Joesph Mahoney, director at NYSE specialist firm Wagner Stott Bear. “We want to get down here and be successful. The market is still functioning. I can say I saw no panic.”
The future of the economy is uncertain — the stock market could rebound in the following days or could continue its plunge.
“People need to be like investors and think about the long run,” UW-Madison business professor Werner De Bondt said. “Trying to predict the short run is a recipe for disaster.”
Despite hesitations to predict the future, some are certain this slowdown is only temporary.
“There were reasons why it did what it did today,” said Richard Green, UW professor of real estate and urban economics. “What the correct price is, nobody knows. It is likely that that it will go back up in the next year or so.”
Financial security became a question for many and could have contributed to the fall of the market.
“I think what happens in the stock market is probably a reflection of the mood of the country,” De Bondt said.
American confidence was affected in many ways after Tuesday’s attacks.
“People are less confident, [and] that means that the value they put on future earnings is lower, and that transfers into lower stocks,” Green said.
-Reuters contributed to this report