Human tragedy overshadows stock market reopening, area brokers say

Posted: Friday, September 14, 2001

U.S. stock markets are to resume trading Monday, but local brokers say that since the catastrophe in New York, central Kenai Peninsula clients have been focused elsewhere.

"Their hearts are with the families of the victims. Their portfolios are not at the top of their lists of concerns. That's commendable," said Wes Roberts, manager of the Edward Jones office in Soldotna. "It's very interesting to me that for the most part, everybody I've talked to has got the right perspective."

Roberts said he has been calling clients to keep them abreast of what has been happening since two hijacked planes leveled the World Trade Center towers in Manhattan on Tuesday. But he has had few incoming calls.

"I've had a couple of people wondering when they'll be able to liquidate if they want to. But I haven't had anyone adamant about getting out when the market opens," he said.

That may be because Edward Jones counsels clients to invest only for the long-term in stocks, and not with cash they will need for short-term expenses, he said.

Roberts said Edward Jones is fortunate to have its home office in St. Louis. No Edward Jones associates were at the World Trade Center when the attack occurred, he said. John Bachmann, the company's managing partner, was in midtown Manhattan during the attack, but escaped unscathed.

John Hoyt, vice president and manager of the Wells Fargo branch in Soldotna, said Wells Fargo is based in San Francisco and also has a significant presence in Minneapolis.

"We came out very well. We did not have any of our businesses directly affected. We had no offices in the Trade Center. We had partner entities in New York, but as a banking entity, we're primarily not in the New York area," Hoyt said.

Bob Whittenberg, Wells Fargo broker in Soldotna, also said he had taken no incoming calls from his clients. However, he has called many of them to gauge their feelings.

"They've been very stunned by the tragedy and maybe less focused on the overall ramifications," he said.

Whittenberg said he has encouraged clients to develop diversified portfolios and told them to expect volatility.

"The key is to be diversified, have a well-thought-out plan and not react to short-term events," he said.

The Nasdaq, the American Stock Exchange and the New York Stock Exchange are to resume trading Monday at 9:30 a.m. eastern time, following the longest halt to trading since World War I. The Amex and the NYSE are located within three blocks of the former Trade Center. According to a Washington Post story, damage to the Amex was so severe that parts of its operations may temporarily be relocated to the NYSE or to other locations.

The Nasdaq has no physical trading floor, but operates instead through a network of computers. While its headquarters is next door to the wrecked Trade Center, its primary and backup trade centers are located outside New York City and were unaffected by the catastrophe.

Bond and futures markets reopened Thursday.

"U.S. bonds were mostly higher as investors sought the relative safety of government securities after the worst terrorist attack in U.S. history," said a Thursday statement from Edward Jones.

The 30-year Treasury bill was unchanged, holding the yield at 5.39 percent. The 10-year Treasury closed at 4.62 percent, the three-month T-Bill closed at 2.82 percent, and the six-month T-bill closed at 2.8 percent.

In commodity markets, spot gold rose $3.75 to $282, and spot silver fell $.01 to $4.22. The price of West Texas Intermediate Oil fell $1.08 to $28.02 a barrel.

Roberts said U.S. stock markets historically have shown short-term declines, then recovered, following disasters such as the Pearl Harbor attack, the assassination of President Kennedy and the Falkland Islands war.

Whittenberg said some overseas stock markets declined following Tuesday's attack, but many European exchanges are now bouncing back. The Toronto Stock Exchange, the only one operating in Canada, rose slightly Thursday. There may be some volatility when U.S. markets reopen, he said.

However, Wells Fargo remains optimistic for the future of U.S. markets. There are some positive signs, Whittenberg said. The Federal Reserve has promised to do whatever is necessary to maintain financial stability. Statistics show continued growth in U.S. productivity, he said, and consumer confidence is supported by rising real income. Federal tax cuts and mortgage refinancing, sparked by declines in interest rates, are putting more money in consumers' pockets.



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