Stocks tumbled in opening trade yesterday as Wall Street reopened after a four-day closure due to last week's terrorist attacks.
The NASDAQ composite slid 5.89 percent to 1,595.40 in the first 15 minutes of trade while the Dow Jones Industrial Average fell 2.19 percent to 9,394.74.
The broader Standard and Poor's 500 fell 1.89 percent to 1,069.55 in early trade after the New York Stock Exchange observed two minutes of silence in memory of the victims of the attacks in the heart of the world's financial district.
Attention everywhere was focused on the New York Stock Exchange to see if, after a four-day closure, it would struggle to throw off the tragedy of the World Trade Center destruction just three blocks away -- or whether it would signal the start of a deep global recession.
The US Federal Reserve slashed interest rates half a percentage point yesterday just ahead of the opening of Wall Street, saying that "even before the tragic events of last week, employment, production and business spending remained weak, and last week's events have the potential to damp spending further."
The US Fed said it was cutting the closely watched federal funds rate to 3 percent from 3.5 percent, its eighth rate cut this year.
Markets in Taiwan are closed today as Taipei continues to clean up the damage brought by Typhoon Nari.
The TAIEX last week fell to an eight-year low in the two trading days after last week's attacks. The main index plunged 527.54 points last week -- or 12.3 percent -- to 3,774.62 on Friday, its lowest level since Sept. 17, 1993.
"Taiwan stocks may suffer more losses [this week] if the US market takes a dive that exceeds 15 percent when it resumes trading," said Capital Securities analyst Richard Tsai. "Sentiment here may be weakened further if there are no signs of fresh leads or government-led buying to support the market."
Joe Teng, assistant vice president of research at President Securities, said US markets may soon stabilize if the US government takes swift retaliatory action to put an end to the current crisis.
"If that's the case, the Taiwan market is expected to form a bottom at the 3,800-point level," Teng said.
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