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News > International
Europe closes higher
September 17, 2001: 12:43 p.m. ET

Gains follow U.S. Fed rate cuts; ECB follows suit after markets close
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NEW YORK (CNNfn) - Europe's main stock markets posted significant gains Monday after the U.S. Federal Reserve Board cut interest rates by a half-percentage point in a surprise move before the New York Stock Exchange opened for the first time since the terrorist attacks in New York and Washington.

After the close of trading in Europe, the European Central Bank followed the Fed and cut rates by a half-percentage point as well, saying it was a coordinated effort to stave off economic weakness after the attacks.

The Fed said economic weakness in the U.S. outweighs the threat of inflation, an indication it may continue to lower rates.

London's FTSE 100 closed 2.7 percent higher at 4,856.5 while Frankfurt's electronically traded Xetra Dax added 4.14 percent to 4,286.28. The CAC 40 blue chip index in Paris climbed 2.7 percent to 4,014.9.

U.S. stocks opened sharply lower, but bounced off their lowest levels of the session by midday.

 Market Movers
graphic FTSE 100 / FTSE 250
graphic DAX 30 / DAX 100
graphic CAC 40 / SBF 80
 
Airlines across Europe again saw heavy losses. CNN's Liz George said the carriers are bearing the brunt of the big financial losses following the attacks on the world's financial center and subsequent closure of U.S. airspace.

German flag carrier Lufthansa (FLHA) plummeted 16.1 percent and Swissair dived 10.1 percent in Zurich. Air France (PAF) also fell heavily, down 10.7 percent in Paris.

In London, Europe's biggest airline, British Airways (BAY), was down 0.2 percent after pulling back from steep losses earlier. The company reported it now is flying 70 percent of its scheduled service to the U.S. from Heathrow airport and 80 percent from Gatwick.

The prospect of U.S. military action aided defense and aerospace companies.

Europe's biggest defense company, BAE Systems (BA-), rose more than 1 percent in London, while French defense firm Thales (PHO) led gainers in Paris, rising 1.8 percent.

Many insurers, which had continued their downward plight in morning trade, reversed into the black.

Europe's biggest insurer, AXA (PCS), climbed back from negative territory to top the gainers in Paris, up 4.6 percent.

Rival AGF (PAG), majority-owned by Allianz of Germany, was flat while Allianz (FALV) was the best performer in Frankfurt, rising 4.8 percent.

Germany's Munich Re (FMUV3), the world's largest reinsurer, was up 3.1 percent while Swiss Re, the world's second biggest, was up 0.4 percent.

Consumer-sensitive shares such as luxury goods firms were hard hit, such as LVMH (PMC), down 2.9 in Paris and cosmetics firm L'Oreal (POR), which fell 3.9 percent.

In Amsterdam, the AEX index rose 3.18 percent while the SMI in Zurich climbed 3.11 percent. Milan's MIB30 shed 0.17 percent.

 Market Movers
graphic TechMark 100
graphic Nemax 50
graphic Nouveau Marché
 
Analysts in New York expected U.S. shares to fall at the open, but said the losses could be contained by concerted efforts at the weekend to prop up investor sentiment, Reuters reported.

The Federal Reserve pumped a massive $81.25 billion in temporary reserves into the banking system Friday.

The computer and telecommunications systems of the New York Stock Exchange passed a test-run Saturday, clearing way for the resumption of U.S. stock trading later Monday.

Robert Britz, a group executive vice president in charge of technology for the NYSE, said that not everything was at full strength over the weekend, but traders should have be able to handle the work they get Monday. graphic

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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer.

Morningstar: © 2014 Morningstar, Inc. All Rights Reserved.

Factset: FactSet Research Systems Inc. 2014. All rights reserved.

Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved.

Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2014 and/or its affiliates.