The psychological impact of July 7's bombings in London could linger for sometime among Americans.
But, says David Rosenberg, chief North American economist at Merrill Lynch & Co., New York, if the after-effects from the Mar. 11, 2004, terrorist bombing in Madrid are an accurate guide, the market impact of the London bombings "will likely prove brief" and their impact on the overall U.S. economy is likely to be "basically non-existent."
Rosenberg notes that while the Dow Jones Industrial Average slid 168 points on the day of the Madrid attack, moves "into currency havens like the dollar and gold" were very brief. And for all of March, the month of the Madrid attacks, U.S. consumer sentiment rose, retail sales soared and nonfarm payrolls added 320,000 jobs, he adds.
However, Rosenberg does allow "there are notable differences" between Thursday's attack in London and the Madrid attach last year, including the fact that London is a major financial center.