Futures Plunge On World Trade Center, Pentagon Terrorist Attacks

Two planes crashed into the World Trade Center this morning, collapsing both towers in an apparent massive, coordinated terrorist attack. A plane later crashed into the Pentagon, and other unconfirmed explosions were reported in Washington. Thousands were feared dead in the attacks.

A plane later crashed about 80 miles south of Pittsburgh.

According to witnesses, two planes flew into the massive World Trade Center towers, the tops of which were engulfed in flames after the crashes. Both towers later completely collapsed like building demolitions. The second crash was caught on film, and it appeared to be deliberate.

According to news reports, four commercial jets crashed, and at least two of them were hijacked. A small plane also crashed into one of the World Trade Center towers. Two American Airlines jets – Flight 11 from Boston to Los Angeles, and Flight 77 from Dulles to Los Angeles – and two United Airlines jets
– Flight 93 from Newark to San Francisco, and United Airlines Flight 175, from Boston to Los Angeles – all crashed.

The NYSE was evacuated because of the World Trade Center bombing and closed for the day. The Nasdaq had planned to open, but later announced that it would remain closed for the day.

An early rally based on a positive pre-announcement from Nokia fell apart on the news, as index futures and foreign markets plunged.

Nokia , the Finnish cell phone giant, reaffirmed earnings estimates this morning. Nokia guided revenue estimates about 5% lower, but the stock was up about 10% earlier this morning because expectations were for much worse. Nokia also said there are signs of improvement in the U.S. market.

Nokia’s revenues have been slipping for the last few quarters, but with only a 13% drop in earnings this year, the company has weathered the tech downturn far better than any other tech giant. And at a PE just above 20, it is far cheaper than any other big-cap tech stock. Compare Nokia numbers to Cisco’s PE of 75 and earnings decline of 53%.

We can’t begin to guess how Nokia will ultimately weather the global recession, but from the company’s current valuation standpoint, there is no better technology stock out there. There is some question whether the company is losing market share to rivals, but at about half the forward PE of Ericsson and Motorola – which are currently losing money despite much lower price-to-sales ratios – NOK appears to be the better bet for investors.

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