- The Washington Times - Monday, August 2, 2004

NEW YORK (AP) — The New York Stock Exchange sought to reassure anxious investors yesterday after the government identified the stock market as a potential terrorist target, calling on a mayor, a governor and a senator to ring the opening bell.

Financial stocks were under pressure amid warnings from the government over the weekend that financial institutions including the New York Stock Exchange, Citigroup Inc., Prudential Financial Inc. and the World Bank could be targeted by terrorists.

But after spending much of the day in a slump, major market indicators ended modestly higher after a late round of buying, repeating a pattern that has become familiar in recent trading sessions.

The Dow Jones Industrial Average closed up 39 points, or 0.4 percent, to 10,179. It was the Dow’s fifth straight advance, its longest rally of the year and the first time since late November-early December that it put together five consecutive winning sessions.

Other market indicators also rose. The Standard & Poor’s 500 index rose five points, or 0.4 percent, to 1,107, and the Nasdaq Composite Index was up five points, or 0.3 percent, to 1,892.

At the NYSE, additional security and police officers could be seen around the building, including officers with assault rifles and protective vests. However, inside, the people who work at the exchange continued as normal.

“This is no different than any other day,” said Bradley Simkins, a floor trader. “Security has always been tight. But aside from all the press, and all the people like Mayor Bloomberg and Governor Pataki coming through here, nothing is really different.”

New York Mayor Michael R. Bloomberg rang the opening bell. New York Gov. George E. Pataki toured the floor, shaking hands with traders and thanking them for coming into work in the wake of the terror threat. Sen. Charles E. Schumer, New York Democrat, also visited the exchange.

“I would use the word ‘defiant’ to describe these guys,” Mr. Pataki said. “It makes us proud to see all these people here with American flags on their jackets going about their work.”

The new terrorism warning puts the spotlight back on security at the NYSE, which was forced to halt trading for four days after September 11, 2001. In the time since, exchange officials have labored to assure its ability to operate even if another terrorist attack happens and to reassure investors and traders.

In 2001, for example, the NYSE’s problem was the loss of a major telecommunications switching center at the World Trade Center, cutting off communications between broker-dealers and the market. The exchange and securities officials responded by creating a private fiber-optic network that links trading firms with data at multiple sites. If the system fails at one point, the data traffic would be rerouted automatically, the exchange says.

The NYSE also has a backup trading floor that it says could be activated within one day should something happen to its landmark Wall Street site. In addition, the current trading floor is connected with four other operating sites in four different buildings, allowing officials to shift trading in case of an attack or other disaster.

Millions of dollars have been spent to develop redundant systems that could take over after a terrorist attack to make sure that bank customers are able to continue to cash checks, make deposits and withdraw money from automated teller machines.

Many of those systems have been put in place since the September 11 attacks.

Treasury Secretary John W. Snow said his agency, which has not been listed as a specific target in the latest terrorist threat warning, is working closely with the Department of Homeland Security and federal, state and local financial regulators, among others, to make sure the nation’s financial system would be able to withstand any attack and to “quickly respond to any potential market disruptions.”

Federal Reserve Chairman Alan Greenspan told Congress recently that his agency, which oversees the country’s biggest banks, continues to upgrade systems to deal with the “fortunately low but still deeply disturbing possibility” of a new terrorist attack.

Officials at all of the financial institutions targeted in Sunday’s threat warning — the NYSE, Citigroup Inc., Prudential Financial, the International Monetary Fund and the World Bank — stressed that they thought they had sufficiently strengthened systems to guard against major disruptions to critical operations.

Those moves have included improving communications systems connecting major financial institutions and conducting numerous drills to test backup systems in the event of a terrorist attack.

The Fed has refined the procedures it used after the September 11 attacks to monitor payment flows between banks and, if necessary, flood the financial system with money to make sure that temporary disruptions in those flows don’t cascade into serious problems.

The Fed provided a record $45 billion in short-term loans to the banking system in the days right after the 2001 attacks to ensure that all banks had the resources needed to meet withdrawal demands.

Officials said contingency plans also were in place for threats to the Bureau of Engraving and Printing. Stockpiles of paper currency are not stored at the Washington plant, but rather shipped to the Fed’s 12 regional banks for release into the nation’s money supply as needed.

Copyright © 2019 The Washington Times, LLC. Click here for reprint permission.

The Washington Times Comment Policy

The Washington Times welcomes your comments on Spot.im, our third-party provider. Please read our Comment Policy before commenting.


Click to Read More and View Comments

Click to Hide