Economic impact from marathon bombings muted
Security is beefed up in some cities after the attack in Boston, but the stock market is recovering. The city vows to move forward.
Certainly, the emotional toll is heavy. Three people are dead, including an 8-year-old boy. Families are grieving, lives are shattered and the country is searching for answers.
But the economic impact from the explosions is muted. Officials in New York and other cities have stepped up security at hotels and other notable locations. The area around Boston's Copley Square remains closed, and state troopers and National Guard members were monitoring the city and its transit systems.
After plunging Monday in the worst decline so far this year, stocks were recovering Tuesday. "Markets tend to sell off immediately when there is a crisis because people don't know what the long-term impact is, but as more details become available they revert to the mean, they go back to the direction that they were going in the first place," Michael McKee, Bloomberg News' economics editor, said in this video.
Studies have shown that the American economy roars back after national tragedies, McKee added. One research firm studied the impacts of the Iranian hostage crisis, the assassination of President Kennedy, the space shuttle disaster and the Iraqi invasion of Kuwait and found similar results.
"In each case, confidence dipped a little bit and then came back strongly," McKee said. "The American people tend to come together after major events, and that's what happened after 9/11."
It's too early to know the full economic impact of Monday's bombings, but many in Boston vowed to move forward. The city will not be paralyzed by fear, wrote Boston Globe columnist Scot Lehigh. "We'll take reasonable precautions, yes," he wrote. "But we won't take cover. And we won't cower. This, after all, is Boston."
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[BRIEFING.COM] The stock market ended the holiday-shortened week on a mixed note as the Dow Jones Industrial Average shed 0.1%, while the S&P 500 added 0.1% with seven sectors posting gains.
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