Paper 2
Brian McEvoy
Don and Mike
Paper 2
Brian McEvoy
Don and Mike
Paper 2: 9/11 The effects on Wall Street.
To prevent a stock market meltdown, the New York Stock Exchange (NYSE) and the Nasdaq did not open for trading on Tuesday morning, September 11, 2001. When American Airlines Flight 11 crashed into the North Tower of the World Trade Center at 8:46am, and American Airlines Flight 175 hit the South Tower at 9:03am, it was obvious that American was under attack.
“The assumption that a coordinated terrorist assault by Islamic radicals had targeted some of the country's most iconic structures and institutions was confirmed some time later that morning when a plane hit the Pentagon, and a fourth hijacked plane bound for Washington, D.C., was brought down by passengers in Shanksville, PA”.(The 9/11 Commission Report)
“Anticipating market chaos, panic selling and a disastrous loss of value in the wake of the attacks, the NYSE and the Nasdaq remained closed until September 17, the longest shutdown since 1933”(Investopedia). Moreover, many trading, brokerage and other financial firms had offices in the World Trade Center and were unable to function in the wake of the tragic loss of life and collapse of both towers. “On the first day of NYSE trading after 9/11, the market fell 684 points, a 7.1% decline, setting a record for the biggest loss in exchange history for one trading day. At the close of trading that Friday, ending a week that saw the biggest losses in NYSE history, the Dow Jones was down almost 1,370 points, representing a loss of over 14%”(Investopedia). An estimated $1.4 trillion in value was lost in those five days of trading.
The airplane companies that were sadly involved in the attacks by those radical terrorists lost almost half of their stock value. It is the sad truth that something this devastating had caused companies to plummet. merican Airlines (NYSE:AMR) stock dropped from a $29.70 per share close of September 11 to $18.00 per share close on September 17, a 39% decline. United Airlines (NYSE:UAL) stock dropped from $30.82 per share close to $17.50 per share on the close on September 17, a 42% decline.
However some companies such as security companies, and companies within that realm of business boomed. Once again for something this devastating to take place I can bet the companies that boomed would wish they did not boom for those reasons. Some sectors, however, prospered as a result of the attacks. Certain technology companies as well as defense and weaponry contractors saw prices for their shares increase substantially, anticipating a boost in government business as the country prepared for the long war on terror. Stock prices also spiked upward for communications and pharmaceutical firms.
On the nation's options exchanges, including the Chicago Board Options Exchange (the world's largest), put and call volume increased correspondingly. Put options, which allow an investor to profit if a specific stock declines in price, were purchased in large numbers on airline, banking and insurance shares. “Call options, which allow an investor to profit on stocks, which go up in price, were purchased on defense and military related companies. In the short term, investors who had purchased these options made money”(The Ground Truth).
The U.S. economy is legendary for its strength and resilience, and the national character is persistently optimistic. No more than one month had elapsed before the Dow Jones, the Nasdaq and the S&P had regained its pre-9/11 price levels.
America's current economic problems may not be directly related to the 9/11 attacks, although a persuasive argument could be made that a large percentage of our national debt is attributable to the extremely expensive war on terror in Iraq, Afghanistan and elsewhere, which has increased the U.S. national debt by trillions of dollars.
Kean, Thomas H., and Lee H. Hamilton. The 9/11 Commission Report: Final Report of the National Commission on Terrorist Attacks Upon the United States. Bridgewater, NJ: Replica, 2004. Print.
Farmer, John J. The Ground Truth: The Untold Story of America under Attack on 9/11. New York: Riverhead, 2009. Print.
Davis, Marc. "How September 11 Affected The U.S. Stock Market."Investopedia. N.p., n.d. Web. 25 June 2014.
Don and Mike
Paper 2
Brian McEvoy
Don and Mike
Paper 2: 9/11 The effects on Wall Street.
To prevent a stock market meltdown, the New York Stock Exchange (NYSE) and the Nasdaq did not open for trading on Tuesday morning, September 11, 2001. When American Airlines Flight 11 crashed into the North Tower of the World Trade Center at 8:46am, and American Airlines Flight 175 hit the South Tower at 9:03am, it was obvious that American was under attack.
“The assumption that a coordinated terrorist assault by Islamic radicals had targeted some of the country's most iconic structures and institutions was confirmed some time later that morning when a plane hit the Pentagon, and a fourth hijacked plane bound for Washington, D.C., was brought down by passengers in Shanksville, PA”.(The 9/11 Commission Report)
“Anticipating market chaos, panic selling and a disastrous loss of value in the wake of the attacks, the NYSE and the Nasdaq remained closed until September 17, the longest shutdown since 1933”(Investopedia). Moreover, many trading, brokerage and other financial firms had offices in the World Trade Center and were unable to function in the wake of the tragic loss of life and collapse of both towers. “On the first day of NYSE trading after 9/11, the market fell 684 points, a 7.1% decline, setting a record for the biggest loss in exchange history for one trading day. At the close of trading that Friday, ending a week that saw the biggest losses in NYSE history, the Dow Jones was down almost 1,370 points, representing a loss of over 14%”(Investopedia). An estimated $1.4 trillion in value was lost in those five days of trading.
The airplane companies that were sadly involved in the attacks by those radical terrorists lost almost half of their stock value. It is the sad truth that something this devastating had caused companies to plummet. merican Airlines (NYSE:AMR) stock dropped from a $29.70 per share close of September 11 to $18.00 per share close on September 17, a 39% decline. United Airlines (NYSE:UAL) stock dropped from $30.82 per share close to $17.50 per share on the close on September 17, a 42% decline.
However some companies such as security companies, and companies within that realm of business boomed. Once again for something this devastating to take place I can bet the companies that boomed would wish they did not boom for those reasons. Some sectors, however, prospered as a result of the attacks. Certain technology companies as well as defense and weaponry contractors saw prices for their shares increase substantially, anticipating a boost in government business as the country prepared for the long war on terror. Stock prices also spiked upward for communications and pharmaceutical firms.
On the nation's options exchanges, including the Chicago Board Options Exchange (the world's largest), put and call volume increased correspondingly. Put options, which allow an investor to profit if a specific stock declines in price, were purchased in large numbers on airline, banking and insurance shares. “Call options, which allow an investor to profit on stocks, which go up in price, were purchased on defense and military related companies. In the short term, investors who had purchased these options made money”(The Ground Truth).
The U.S. economy is legendary for its strength and resilience, and the national character is persistently optimistic. No more than one month had elapsed before the Dow Jones, the Nasdaq and the S&P had regained its pre-9/11 price levels.
America's current economic problems may not be directly related to the 9/11 attacks, although a persuasive argument could be made that a large percentage of our national debt is attributable to the extremely expensive war on terror in Iraq, Afghanistan and elsewhere, which has increased the U.S. national debt by trillions of dollars.
Kean, Thomas H., and Lee H. Hamilton. The 9/11 Commission Report: Final Report of the National Commission on Terrorist Attacks Upon the United States. Bridgewater, NJ: Replica, 2004. Print.
Farmer, John J. The Ground Truth: The Untold Story of America under Attack on 9/11. New York: Riverhead, 2009. Print.
Davis, Marc. "How September 11 Affected The U.S. Stock Market."Investopedia. N.p., n.d. Web. 25 June 2014.