News About Banking Industry

Stocks shake off terror fears and move higher; Dow up more than 100 points

Stock markets around the world, including on Wall Street, are reacting in a muted fashion to the deadly terror attacks in Paris late Friday, as investors seek solace in history that shows acts of terrorism do not have a large or lasting impact on the economy. Financial market history shows that the U.S. stock market often takes a short-term hit after terror incidents, but that the declines are short-lived and any losses are quickly recouped.1215-stock-market_full_600

The impact on financial markets following the Paris attacks, however, seem to be far less dire, perhaps due to the fact that the attacks occurred late Friday when markets were closed, eliminating the chance for the knee-jerk reaction to sell first and ask questions later. “The risk asset reaction following the terrorist attacks in Paris has been muted,” Sreekala Kochugovindan of Barclays told clients in a report this morning.

Stocks on Wall Street turned higher at midday after initially trading in a tight range. The Dow Jones industrial average was up about 150 points, or 0.9%. The Standard & Poor’s 500 index was up 0.8% and the Nasdaq composite index gained 0.5%. The yield on the 10-year Treasury note fell to 2.26%, down from 2.28% late Friday. Gold prices moved higher, rising 0.3% to 1,084 an ounce. Oil prices recovered after initially falling in early trading as U.S. benchmark crude gained 1.5% to $41.35 a barrel in afternoon trading.

Stock markets in Europe, which are near the epicenter of the Paris attacks, have held up very well despite the horrific events which resulted in 129 deaths. The CAC 40 in Paris was down a modest 0.1% in trading Monday, and shares of Germany’s DAX index were up slightly, rising 0.04%. London’s FTSE 100 rose 0.5%. The broader Stoxx Europe 600 was up 0.4%. Despite the human loss and tragedy, Wall Street is betting that the economic impact will be limited, although the fallout has yet to be quantified as the attack occurred just a few days ago.