Stocks in Toronto fell sharply on the open, today, but then rebounded. The Toronto Stock Exchange 300 composite index fell 105.15 points, or 1.5 percent, to 6785.70 immediately after the opening. That was the indexÕs lowest level in nearly two years. But since the opening, it rose again and is now up about 70 points.

Airline and insurance stocks have been hit hardest, in light of the airplane attacks in New York and Washington last week. The attacks have injected a large measure of uncertainty into those two sectors. Manulife Financial fell C$2.55, or 6.5%, to C$37. Fairfax Financial slid C$9.99, or 5%, to C$190. Trading of Air Canada’s shares was halted, but have since resumed. West Jet Airlines fell $1.85 to $12.75.

Gold shares rose as prices of the precious metal soared to 18-month highs in London. Placer Dome, one of the continentÕs biggest gold-mining companies, rose 36¢ or 1.9 percent, to $19.55.

U.S. markets reopened this morning after a four-day shutdown caused by the terror attacks in the heart of New York’s financial center and the Pentagon. South of the border, stocks plunged on the open. In early trading, the Dow Jones industrial index and the Nasdaq composite index both fell sharply. The Dow fell 580 points, 6%, to 9,024 and the Nasdaq dropped 104, 6.2%, to 1,590, despite a half-point rate cut by the Federal Reserve this morning in an effort to bolster the markets. The Standard and Poor’s 500-stock index slipped 55, 5% to 1,037.

In a statement which set out the FedÕs willingness to take urgent action to stabilize financial markets, it said it was cutting the closely-watched federal funds rate to 3% from 3.50&, its eighth rate cut this year. As expected by many on the Street, the Federal Open Market Committee decided today to lower its target for the federal funds rate by 50 basis points to 3% and it cut the discount rate to 2.5%.

The Federal Reserve says it will continue to supply unusually large volumes of liquidity to the financial markets, as needed, until more normal market functioning is restored. As a consequence, the FOMC recognizes that the actual federal funds rate may be below its target on occasion in these unusual circumstances.

“Even before the tragic events of last week, employment, production, and business spending remained weak, and last week’s events have the potential to damp spending further. Nonetheless, the long-term prospects for productivity growth and the economy remain favorable and should become evident once the unusual forces restraining demand abate.”

It also left the door open to further easing. “For the foreseeable future, the Committee continues to believe that against the background of its long-run goals of price stability and sustainable economic growth and of the information currently available, the risks are weighted mainly toward conditions that may generate economic weakness.”