Capital Markets

London Blasts Shake Markets

U.S. futures, as well as oil prices, fall amid market uncertainty caused by explosions during London's morning rush.
Marie LeoneJuly 7, 2005

U.S. stock futures and oil prices fell this morning after reports of several subway and bus explosions in London, according to the Associated Press.

AP noted that Dow Jones futures plummeted 181 points, Nasdaq futures dropped 34 points, and S&P futures fell 7 points. Meanwhile, crude oil prices which, for the first time, peaked just above $62 a barrel earlier today, dropped sharply amid market uncertainties spawned by the explosions in the capital city.

Indeed, on the New York Mercantile Exchange, light sweet crude for August delivery tumbled $1.88 to $59.40 a barrel in electronic trading by midday in Europe. Heating oil prices fell to $1.7467 a gallon, about a 5 cent drop, and unleaded gasoline sunk by more than 4 cents to $1.7455.

In the corporate sector, insurance and travel stocks fell precipitously, and the British pound sank, reported the AP. In London, the hotel group Hilton sunk 7 percent, to $4.87; British Airways dropped 6 percent, to $4.49; and in Germany, Lufthansa’s stock dropped 3.4 percent, to $11.73. Also in Germany, Munich Re, the world’s largest reinsurer, tumbled 4.2 percent, to $101.83; and insurance company Allianz dropped 3.7, to $112.39.

News reports indicate that the blasts, which ripped through sections of the London subway system and three double-decker buses, were nearly simultaneous and occurred during the morning rush hour, noted the AP. Injuries and fatalities were reported by police and several news organizations, however the extent of those casualties are still unknown. London city officials have shut down the entire Underground train system.

The explosions came a day after the International Olympic Committee announced that London would be the host city of the 2012 games, and as the G-8 summit in Scotland was commencing.