Consensus seemed to be that the markets in Europe and the U.S. mostly held steady amid the attacks that rocked Brussels Tuesday, killing 30 and wounding 230 others.
As acts of terror have become more common, both U.S. investors and their European counterparts have tended not to overreact.
David Kelly, chief global strategist at JPMorgan Funds in New York told Reuters, "The news obviously has been dominated by what has gone on in Brussels, but experience tells us not only is it the morally right thing to do to basically not overreact, it also turns out to be the most profitable thing to do."
Impact On Benchmarks Modest
As a result, major benchmarks ended mixed Tuesday with the Dow Jones industrial average down 0.2%, Nasdaq up 0.3% and the S&P 500 down 0.1%.
In Europe, the Stoxx Europe 600 was off 0.2% while Germany’s DAX rose 0.4%. In Paris, the CAC 40 as well as London’s FTSE each were up 0.1%.
European Travel Stocks Takes A Slight Hit
Most of the early damage was felt by travel-related stocks in Europe. This included low-cost air carriers such as Ryanair, down 1.1% and EasyJet, which was off 0.5%.
In addition, Air France dropped 4% and Paris-based hotel chain, Accor fell 3.9%.
Additional Damage Felt By U.S. Airlines
With U.S. airlines canceling flights to Brussels, there was a negative ripple effect stateside as well.
Cruise Lines Travel Bookers Also Down
Meanwhile, travel booking site, Priceline Stock not found PCLN was down 2.3% and Expedia (NASDAQ:EXPEC) dropped 1.8%. All this led TD Ameritrade's chief strategist, J.J. Kinahan to note, "The only sector that appears to be truly suffering, naturally, is anything having to do with travel."
History Says ‘Shrug It Off’
It may seem counterintuitive to all but ignore major events like terrorist attacks, as The Washington Post reports, a quick look at history provides plenty of support for that view.
The newspaper pointed to an analysis of stock market reaction to 26 major terrorist events since the 1970s by Jeffrey Kleintop, chief global investment strategist for Charles Schwab.
According to Kleintop, it took 2.8 weeks, on average, for major stock indexes to return to where they were before the attacks. Certain major events, such as the invasion of Kuwait bumped the average up, for example, following the London Stock Exchange bombing in 1990, but overall recovery happened in less than 3 weeks.
Limited Economic Impact
Essentially, Kleintop says, Wall Street sees the attacks as having limited economic impact. Consumers tend to defer purchases but not put them off entirely.
Once a sense of normal returns, shoppers resume shopping, buyers buy and the economy returns to near normal. According to some analysts, consumers sometimes even become defiant as a way of showing the terrorists that life goes on and the bad guys have not won.