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Stocks Move Higher On Bin Laden's Death


Let's find out now how the death of Osama bin Laden in a U.S. raid over the weekend is affecting the financial markets. NPR's Jim Zarroli is on the line from New York.

Jim, good morning.


INSKEEP: So what's the effect?

ZARROLI: Well, we saw a kind of bump in stock prices around the world, in Asia and in Europe. The German stock market hit a three-year high. We also saw a kind of big drop in gold and silver prices. They've been going up a lot lately, which happens in uncertain times. They're seen as sort of a safe haven. They were down a bit today.

Likewise, oil prices, they've been going up for a while, largely because of the unrest in the Middle East and North Africa. They fell this morning. So, you know, at least at first, investors seemed to be responding pretty positively.

INSKEEP: So a wide range of investors - those who invest in stocks as well as those who are so concerned about the economy that they're investing in precious metals - everybody seems to think that the world's a little bit more secure this morning than it was on Friday.

ZARROLI: Yeah. You could make the argument bin Laden was a major terrorist. As long as he was out there, he was a threat to other countries, at least as a kind of a figure head. I mean, it's not clear how much he's been actively involved, directly involved in terrorism for years.

So the fact that he's gone makes for a more stable world. And of course, the financial markets like stability. You know, look at what the unrest in the Middle East has done to oil prices, as an example.

On the other hand, I don't think that anyone would think that because bin Laden is gone, the terrorist threat is over. In fact, the CIA is warning today that there may be attempts to avenge bin Laden, and it's advising people about travel. So I think we saw an immediate burst of euphoria in the markets, almost kind of a knee-jerk reaction. But I think people are very likely to come back down to earth pretty quickly now.

INSKEEP: So realistically, at least in the short term - at least in the short term - the security situation may not actually be that much different. And in fact, people are being warned to be on guard. But of course, there is the huge psychological effect of this guy being gone.

ZARROLI: Yeah. And that's kind of an intangible effect. And it's a little bit harder to assess. The American people are feeling, you know, kind of triumphant this morning about what's happened, feeling pretty good about it. You know, that can translate into a sort of a sense of confidence and pride. And, of course, Americans haven't been feeling very good about the economy lately. We've been stuck in this long, sluggish patch, this post-recession period that doesn't seem to end.

Last week, we found out, for instance, the economy grew a lot more slowly than expected. So, you know, within the - and not just the United States, but in Europe, too, we haven't had a lot of reasons for optimism. But this kind of a thing - the death of bin Laden - can, you know, it can give a boost to people's spirits. And that sometimes has an impact on the economy. It's hard to say for sure what kind, but it definitely could.

INSKEEP: You know, your statement that oil prices seem to have gone down, at least temporarily, does raise the question, once again, to what extent the oil market is a little bit faith-based - because it is hard to say exactly how bin Laden's death is going to affect the supply or demand of oil.

ZARROLI: Right, right. I mean, he was, you know, of course, he was a threat -not just to the United States. He was an enemy of some of the Gulf states that provide the world with a lot of oil, especially Saudi Arabia. If you go back to 9/11, that had an immediate impact on oil prices. So you might say there was a kind of Osama bin Laden premium on oil for a while.

But on the other hand, that was a long time ago. You know, the oil markets have gone on. A lot of other factors are more important today. So just like in the stock market, you know, we have had this kind - you know, temporarily it will bring down prices, but the impact will be temporary.

INSKEEP: Jim, thanks very much.

ZARROLI: You're welcome.

INSKEEP: That's NPR's Jim Zarroli, in New York.

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INSKEEP: This is NPR News. Transcript provided by NPR, Copyright NPR.

Steve Inskeep is a host of NPR's Morning Edition, as well as NPR's morning news podcast Up First.
Jim Zarroli is an NPR correspondent based in New York. He covers economics and business news.