By Clyde Noel

Town Crier Correspondent

The terrorist acts in the United States last Tuesday have completely changed strategy for business and the stock market. The impact will be broad, experts say, because people will spend less money.

The catastrophic events have dealt a hammer blow to consumer confidence and sent wary investors fleeing to gold and other assets that people consider in uncertain times.

News of the crumbling World Trade Center early last Tuesday morning gave several depositors enough time to call at their banks’ teller windows in Los Altos asking to withdraw their money in cash. Banks immediately set a limit on the amount a depositor could withdraw and the run ceased.

President Bush said in a televised address to the nation, “Our financial institutions remain strong and the American economy will be open for business as usual.”

Many Main and State street businesses closed Tuesday and Wednesday. The streets were bare except for coffee shops, where people talked about the future.

Bob Clark, consultant to the Los Altos Bar and Grill, said business was sparse last Tuesday compared to after the 1989 earthquake. “After the earthquake, people came to the Grill to talk to each other. Last Tuesday we could have gone home early in the evening,” he said.

In the coming days, people will invest less and spend less as they try to determine what the future will bring. That makes the stock market vulnerable after being closed four days.

The closure of the stock market last week is unprecedented. The market closed at the beginning of World War II, in honor of the end of World War II in August 1945, and again after the 1963 assassination of President Kennedy - but not for as many days.

“The bond market opened last Friday in an orderly fashion and that’s assuring because it came from foreign markets,” said Rick Glaze of Glaze Capital Management in Los Altos. “Historically, after our other disasters the market has recovered and come back to its original level.”

Analysts advise investors not to sell their holdings in a panic and not to try to cash in on the tragedy by buying stocks they think might spike up. There are times when the best thing to do is nothing.

For the long term, the U.S. economy is big and resilient, experts say. People will pull together, and the Federal Reserve will address short rates. The U.S. economy is the strongest and most stable in the world, and that ultimately influences what happens on Main and State streets in Los Altos.