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Last Updated: Saturday, 16 August, 2003, 00:08 GMT 01:08 UK
Firms struggle to resume business
Pedestrians walk though garbage outside Grand Central Station
The daily commute proved tricky
Financial markets have recovered quickly from the effects of widespread power blackouts in the US and Canada, but transport problems still hit factories and offices.

Many companies have been disrupted, especially in the vulnerable aviation sector.

Airlines have cancelled hundreds of flights and analysts say this may cost the industry tens of millions of dollars.

The New York Stock Exchange opened as usual on Friday, although trading was light as many people struggled to get into work.

In New York, Mayor Michael Bloomberg urged non-essential workers to take the day off, warning that the subway system would still not be fully restored by the evening rush hour.

But despite the problems suffered by some industries, analysts said the impact on the overall economy was unlikely to be significant.

Quiet trade

Trading on the NYSE began on time on Friday, but there was little movement in share prices and the main share indexes closed barely changed.

The Dow Jones finished up 11.13 points at 9,321.69 while the Nasdaq edged up 1.67 points to 1,702.01.

A handwritten list of flights replaces electronic flight information boards
Air travel is still being disrupted
"It's very, very quiet. Virtually nothing's going on," said Tim Smalls, managing director at S.G. Cowen.

"We're one of the few lucky firms, and got our senior personnel in.

"But there are firms that are shut down and not operating," he added.

The New York Mercantile Exchange, which trades commodities, opened two hours late after problems with its telephone system.

Many ATM machines were put temporarily out of service, with most banks saying they expected normal banking services to be resumed by Saturday.

Airlines struggle

In the business world, the airline industry appears to have been the worst hit.

American Airlines - cancelled 183 flights
Delta Air Lines - expects to cancel 91 flights
US Airways - cancelled 61 flights
JetBlue Airways - expects to cancel 20 flights
United Airlines - cancelled 40 flights
Southwest Airlines - cancelled 17 flights
Continental Airlines - cancelled 11 flights
Air Canada - major disruption to all flights in its worldwide network
Five US and two Canadian airports, including New York's JFK, LaGuardia and Newark, were closed temporarily following the blackout.

However, normal service has yet to be resumed and more than 500 flights were cancelled on Friday.

Air Canada had to cancel all its worldwide flights following a blackout at its main operations centre in Toronto.

However, the airline managed to restart flights on Friday although all services to the US have been grounded until Saturday.

The disruption could not have come at a worse time for the industry, with many airlines financially vulnerable after years of slumping demand caused by global terrorism fears.

"You are probably looking at tens of millions of dollars of losses for the airline industry by the time this settles," said Michael Boyd, an airline industry consultant.

British Airways said it had cancelled six flights on Friday, and has also cancelled three return services on Sunday because aircraft will be in the wrong place.

Car plants hit

Car production also ground to a halt at many North American plants.

Newspaper reader
The future compensation bill could be high
General Motors said that more than a dozen of its plants were closed, with only skilled trades and maintenance personnel reporting for work for Friday's first shift.

Meanwhile Ford said 23 of the company's 44 plants in North America were closed.

One of the US' largest steelmakers, US Steel, said its second-largest plant had been shut down since the blackout.

The insurance sector is also likely to be hit hard, especially by the potential horde of homeowners claiming for losses such as defrosted frozen food.

A spokesman for major insurer Aon said the compensation bill was potentially a "sizeable sum".

And there is also the possibility that power firms may have to pay some form of compensation.

Impact 'slight'

Despite the problems, economists do not expect the blackout to have a major effect on the overall economy.

Strategists at Credit Suisse Private Banking said the blackout would not "have a markable impact in the US economy".

"The impact on the market will be - if there is one - very limited and short termed, as the fundamentals of most companies are not likely to be affected," they said in a note to clients.

Other economists agreed the effect would be minor.

"It looks like power is being restored pretty fast, so the tangible economic effects would be small," said Sung Won Sohn, chief economist at Wells Fargo.

The BBC's John Terrett
"In the business and financial hub of the United States people have been jumpy ever since 9/11"

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