Twenty years since the 9/11 attacks, the events of that day still are fresh in the memories of anyone who lived through them.
Following the attack on Pearl Harbor, President Franklin D. Roosevelt dubbed December 7, 1941, as the day that would live in infamy. Sixty years later, another infamous day rocked America’s consciousness as attacks on the World Trade Center took an enormous toll. Now, 20 years since the 9/11 attacks, the events of that day still are fresh in the memories of anyone who lived through them.
Tuesday, September 11, 2001, opened with clear skies in much of the East Coast, as thousands of investors and Wall Street employees prepared for another trading session. At 7:59 a.m., American Airlines Flight 11 with 92 people aboard took off from Logan International Airport in Boston. Fifteen minutes later, United Airlines Flight 175 with 65 people aboard left Boston. Both planes were headed for Los Angeles, as was the third plane, American Airlines Flight 77 that left Dulles International Airport outside of Washington, D.C., with 64 individuals aboard.
Forty-seven minutes after its departure, hijackers guided American Airlines Flight 11 into the North Tower of the World Trade Center. Seventeen minutes later, United Airlines Flight 175 struck the World Trade Center South Tower. The third suicide flight hit the Pentagon 33 minutes after the South Tower was hit. At 10:07 a.m., two hours and eight minutes after what began as a peaceful September day, the fourth and final suicide flight was forced down in a field outside Shanksville, Pennsylvania, instead of striking a target inside Washington D.C.
These events largely unfolded in front of a global audience. The plane hitting the North Tower at 8:46 a.m. initially was assumed to be an accident, but the second plane hitting the South Tower made it abundantly clear the crashes were intentional.
There was an eerie feeling on Wall Street once it was clear that this was a direct attack on U.S. soil. The opening of trading was the last thing on many people’s minds, but the Nasdaq and New York Stock Exchange removed any question as they chose not to open for trading that day and remained closed until September 17, which became the longest market closure since 1933.
The significance of these attacks for the market was the basis of conversations worldwide. In the five trading sessions after the market reopened, the S&P 500 fell 11.6%. The day after the attacks, European stock markets fell sharply, including declines of 4.6% in Spain, 8.5% in Germany, and 5.7% on the London Stock Exchange. Stocks in the Latin American markets also were hit, with a 9.2% drop in Brazil, 5.2% drop in Argentina, and 5.6% decline in Mexico, before trading was halted. The Dow Jones fell 684 points for a record-setting one-day 7.1% decline. After the initially sharp drop, however, in only 20 trading sessions the S&P recovered all of its initial 9/11 loss.
The aftermath of 9/11 eventually took a toll on the economy and the equity market. Anything travel-related suffered, none more so than the airlines. Massive losses in New York pressured many insurance companies. Losses due to 9/11 were more than one and a half times greater than from Hurricane Andrew that previously produced the nation’s largest disaster loss. New York City, of course, was the most negatively affected as, approximately, 430,000 jobs were lost. Small businesses in Lower Manhattan suffered significantly as, approximately, 18,000 small businesses were destroyed or otherwise negatively impacted after the attacks.
The stock market meandered its way through the several months immediately after 9/11 before the cumulative effects of 9/11, liberal market valuation, and a series of accounting scandals sent the market on a downward spiral that did not end until the S&P 500 established what proved to be a durable bottom on March 12, 2003, at 768.63.
Coincident with the 20th anniversary of the September 11 attacks, excellent programs that detail the events in and around 9/11 will be aired again. Viewing one or more of them may provide worthwhile reminders of the events of that day. The National 9/11 Memorial & Museum provides a moving presentation that should be on every American’s bucket list.
From an investment standpoint, 9/11 underscored the stock market’s long-term resilience. Not even an event as unthinkable as 9/11 that hit at the heart of Wall Street’s functions could produce lasting market damage. As of September 8, 2021, the S&P 500 is 312% higher than its closing level the first day trading resumed after 9/11.
As part of its 20th anniversary coverage, the Wall Street Journal made its September 12, 2001, print edition available online. You can read the entire newspaper at Wall Street Journal Special Edition (newsmemory.com).
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