Associated Press

CHICAGO — Investors’ heightened worries sent bond prices sharply higher Thursday, but no panic trading was evident as U.S. financial markets began their gradual return to business following Tuesday’s terrorist attacks.

The first, cautious trading since the attacks in New York and Washington was in the bond and commodities markets, including the Chicago Board of Trade and Chicago Mercantile Exchange. The activity showed investors are uneasy about a recession, but also relatively restrained amid hopes the Federal Reserve will step in to lower rates for the eighth time this year.

While the stock exchanges remained silent for a third day, economists praised the markets for demonstrating stability at a time when nationwide gloom threatens to worsen an economic slowdown.

"What the bond market is saying is that the probability of a recession has risen," said Sung Won Sohn, chief economist at Wells Fargo &Co. Nonetheless, he found the lack of volatility "very encouraging" under the circumstances.

Another economist called the avoidance of heavy selling and absence of panic evidence of "patriotism in the marketplace."

"There’s an explicit understanding to avoid profiteering," said Jim Glassman of J.P. Morgan Chase &Co. "People understand that the only thing they can do right now is to help the economy, to get back to normal business as quickly as possible."

Stock markets won’t reopen until Monday. But the resumption of electronic and open outcry trading on Chicago’s commodities exchanges was a welcome sight to a financial community paralyzed for two days following the attacks on the World Trade Center and the Pentagon.

The exchanges resumed most of their regular trading in commodities, silver, gold and some financial instruments related to foreign currencies and interest rates. Trading in U.S. stock-related products remained closed, along with the New York Stock Exchange and Nasdaq and other stock markets.

The atmosphere, normally boisterous, was subdued at both.

Midway through the trading sessions, the markets observed a simultaneous moment of silence in memory of the victims, many of them friends or colleagues. The trading floors’ usual din became a hush, and traders stopped their constant shouting and frantic hand gestures to stand with arms folded and eyes closed.

"It’s very different today," said William Dalenberg, a euro-dollar trader at the Merc who, like many others, wore a small American flag tucked in his jacket pocket. "Everyone’s still grieving. … Everyone’s very cautious, I think, about getting into the market."

The jump in bond prices indicated that investors, nervous about the economy even before this week, are seeking safe-haven investments. But the lack of an unusual price movement showed increasing confidence that the Fed will lower rates again — along with uncertainty about how to proceed without the stock market to lead the way.

"We were looking at it as ‘We’ve got to keep it stable,’ " said Steve Anichini, who trades 30-year bonds at the Board of Trade. "And we were waiting for New York.

"The mere fact we showed the world that we were ready to do business I think may have achieved some calming," he said.

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