Terrorism strikes again

Terrorism reared its ugly head again, this time in London.

London Terror Bombings Kill 37, Wound 700
Terror struck in the heart of London on Thursday as explosions ripped through three subway trains and blasted the roof off a crowded red double-decker bus. At least 37 people were killed and more than 700 wounded in the deadliest attack on the city since the blitz in World War II.

British Prime Minister Tony Blair blamed Islamic extremists and said the bombings were designed to coincide with the opening in Scotland of a G-8 summit of the world's most powerful leaders. Foreign Secretary Jack Straw said the bombings -- which came the day after London won the bid to host the 2012 Olympics -- have the "hallmarks of an al-Qaida-related attack"...

Predictably, European stock markets sagged on the news, but were well off their lows for the day -- the FTSE 100 fell 1.36 percent, the DAX index fell 1.9 percent and the CAC 40 fell 1.4 percent. US markets actually rose, the S&P 500 rising 0.2 percent.

Apparently, after so many similar incidents over the past few years, markets have lost some of their sensitivity to such attacks.

The fall in oil prices probably helped. Light sweet crude futures closed at $60.73 yesterday even though the US Energy Department reported a 3.6 million barrel decline in oil inventories for last week.