Slumping airline shares such as British Airways and Alitalia turned European stock markets lower this morning, as flights remained disrupted for a fourth day.
With US markets likely to reopen on Monday, traders debated whether stocks would stage a "patriotic" rally, or stumble as investors sell airlines, insurers and other sectors likely to be hurt by Tuesday's terror attacks.
"I think there's going to be a strong patriotic rally on Monday," said a European equity strategist with a US-based bank. "It might last for 48 hours or so and then the background of the weak economy will show through".
Others thought US markets might dip initially, but few expected a massive sell-off - let alone the panic selling predicted immediately following Tuesday's attacks.
"Rationality has returned. What we're expecting when Wall Street opens is a mark-down on the airlines, the leisure and hotel stocks. The market will go down 2 or 3 per cent and that will be it. And that's already discounted in the market," said the head of derivatives trading at a US brokerage.
Loss estimates for the airline industry - still struggling with tighter security requirements and flight restrictions - range as high as $10 billion.
At 10.30 a.m., the pan-European FTSE Eurotop 300 index was off 0.3 per cent and the DJ Euro Stoxx 50 down 0.1 per cent, giving up morning gains tied to stronger insurance and technology shares.
Wall Street was slated to resume trade on Monday after a four-day closure - its longest since World War One - after weekend tests to ensure systems are functioning in the wake of Tuesday's US terror attacks that demolished New York's World Trade Center twin towers.
Many market watchers were expecting a Federal Reserve interest rate cuts once US markets resume trading. Futures on the federal funds rate at the Chicago Board of Trade jumped to new contract highs yesterday, pricing in a further 0.75 per cent in easing by year-end.