Attacks could hit economy

Terrorism at key U.S. targets could put already shaky economy at risk

September 11, 2001: 11:06 a.m. ET


NEW YORK (CNNfn) - The terrorist attacks Tuesday0K@M on New York City and Washington, D.C., are likely to have an impact on the already sluggish U.S. economy and stock markets.


Both towers of the World Trade Center in New York burning Tuesday morning. Both buildings later collapsed.

"This terrible tragedy is certain to severely dampen consumer confidence and hence have the possibility of shutting down the consumer," said Anthony Chan, chief economist with Banc One Investment Advisors."The extent of this negative impact will depend on whether t@MPOhe Federal government is able to resolve who is responsible and whether U.S. officials can find the individuals responsible for these actions and whether we can add some certainty that this will not happen again."

Two airplanes crashed into the World Trade Center Tuesday morning -- causing both towers to collapse -- and explosions rocked the Pentagon, Capitol Hill and the State Department in Washington, D.C.

There are no estimates of casualties yet, but likely thousands of people were hurt or killed PO`Qin the attack, which government officials are assuming were the work of terrorists.

The economy has been in a year-long slowdown, but thus far has avoided a recession, commonly defined as two consecutive quarters of negative gross domestic product. The Federal Reserve has cut interest rates seven times this year in an effort to keep consumers spending and avoid a recession.


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Friday's report of a higher-than-expected unemployment rate of 4.9 percent in August hei`QpSghtened recession fears on Wall Street, as consumers could stop spending when they fear for their jobs. Tuesday's attack, if dispiriting enough, could also dampen consumer spending.

"At this point the prospects of such a development are not very favorable," Chan said."Consequently, this act has the potential to bring the economy down into a serious recession."

U.S. stock market futures plunged after the first airplane hit the World Trade Center in New York Tuesday morning, and trading was halted indepSKfinitely.