Exchange to do test run over weekend
The New York Stock Exchange plans to reopen for business Monday morning after its longest hiatus in 80 years against a backdrop of dust and debris — fallout from the devastating attack on the World Trade Center towers.
NYSE chairman Richard Grasso announced Thursday the exchange will do a test run over the weekend to make sure systems are up and running. FCC topper MichaelPowell said he feels certain that the nation’s telephone companies such as Verizon and AT&T will be able to service financial markets once they reopen. The bond market has already started up again.
Financial players described an odd feeling of suspended animation with the world’s biggest stock exchange shut down even as they worry at what the opening bell — and the future — will bring.
Investors fear further violence at home or abroad could erode consumer spending, corporate earnings, stock prices and already-strained advertising budgets.
Airlines will surely take a hit, along with gaming, retailing and insurance. “It’s bad for almost everyone except the construction industry,” said one fund manager.
On the upside, market watchers expect the Federal Reserve to resume slashing interest rates with gusto, and they anticipate seeing a wave of government spending injecting fresh cash into the sagging U.S. economy.
“There will be a lot of defense spending; we’ll spend billions of dollars just to upgrade security at airports,” the fund manager added.
No doubt showbiz stocks will take their knocks along with the rest. But Wall Streeters said short-term financial hits from the current crisis, like days of commercial-free news coverage by cable and broadcast nets, are overshadowed by the longer-term direction of the economy — whether it slips into recession or not.
“The big congloms have strong financial positions and can withstand a downdraft in earnings for a few weeks, but I don’t know what the world will look like in six months,” said another investor.
Media shares solid o’seas
If overseas markets are any indication, there’s no reason to assume a rout of media shares once the NYSE resumes operations: Rupert Murdoch’s News Corp., which is also headquartered and traded in Australia, saw its shares rise 2.1% there on Thursday, and Vivendi Universal stock gained 2.5% on the Paris bourse.
Perhaps a bigger challenge for the New York exchange will be one of logistics and morale, with several major investment banks homeless, financial firms suffering casualties among staff and infrastructure, and worries over technical and safety issues.