U.S. stock markets passed preliminary tests of its computer and communications systems Saturday, clearing the way for equity trading to resume as planned on Monday after its longest shutdown since World War I.

"Based on today's evaluation of our systems ... at 9:30 Monday morning trading will resume," New York Stock Exchange chairman Richard Grasso said.

Telephone and utility workers continued reconnecting services Saturday, but "our systems are all go," Grasso said at an early afternoon news conference. The tests are expected to continue throughout the weekend.

The NYSE, Nasdaq Stock Market and American Stock Exchange have been closed since Tuesday, when terrorists destroyed the World Trade Center's twin towers and forced the shutdown of the city's financial district. All three markets plan to reopen on Monday.

The NYSE chairman said the exchange would observe two minutes of silence before the start of trading to honor the thousands of people believed killed in the trade center attack and another assault on the Pentagon.

Financial District Still in Mourning

While trading is set to resume, many investors were still wondering how the market, already fragile due to the weakened economy, will react to the aftermath of the terrorist attacks.

"I would suggest that investors have had this time frame to step back and take a reasoned approach, a thoughtful approach, to their investments," Grasso said.

Almost 5,000 people, including brokers, economists, strategists and their support staff, were still missing in the rubble.

Damage to the American Stock Exchange, located in a building not far from the World Trade Center, was so severe that parts of its operations might be temporarily relocated to the NYSE, which remains intact, or to other regional markets.

The NYSE, located about five blocks from the trade center, was not damaged in the attack. But a telephone switching operation was knocked out, severing some of the communications systems used in trading. And a number of investment firms suffered damage that forced them to relocate some of their operations.

The nation's other major stock market, the Nasdaq, is electronically-based and was not damaged in the attacks.

Stock exchange and city officials promised that access will be at least partially restored to the financial district, and earlier Saturday, subway trains began rolling into the financial district for the first time since Tuesday.

But questions remain as to whether Manhattan's battered financial district can play host to the thousands of business professional needed for a day of trading. There are some 75,000 to 125,000 financial professionals on a regular business day, and about 3,200 people work at the NYSE alone.

About $100 billion worth of trades are conducted every day in the United States, bringing the estimated losses from the shutdown to $400 billion, according to the Securities Industry Association. Investment firms suffered many millions of dollars more in damage.

European Stocks Down, Treasuries Up

International markets wrapped up the week on a sour note, after the pan-European FTSE Eurotop 300 index dropped 3.38 percent and the DJ Euro Stoxx 50 fell 3.55 percent on Friday, giving up initial gains tied to stronger insurance and technology shares. 

The European markets plunged on Tuesday and then posted two straight days of gains. 

Asian stocks headed south on Friday as edgy investors dumped shares, fearing steep losses on Wall Street when U.S. markets resume. But Japanese stocks bucked the trend, jumping 4 percent as banks racked up gains after media reports raised hopes of speedier bad-loan disposals by Japanese banks.

Meanwhile U.S. Treasuries rose again on Friday, sending yields on two-year notes plunging to fresh record lows, as deepening economic gloom and Afghan Taliban warnings of revenge for any prospective U.S. attack heightened market uncertainty.

"The uncertainty in the markets, the weakness in equities, the rising chances of a global recession, plus the high likelihood that we will see rate cuts in the near term will push the market higher," said Kim Rupert, senior economist at Standard & Poor's MMS.

Rupert expects the Fed to cut rates by 50 basis points before its Oct. 2 scheduled policy meeting.

The possibility of a coordinated rate cut by the world's central banks reinforced that scenario. On Thursday, the European Central Bank left its minimum bid rate unchanged at 4.25 percent but reconfirmed that it is ready to support normal functioning of markets and act if needed.

Assessing Long-Term Damage 

Economists have raised grave concerns that the physical and psychological costs of the attack, especially on consumer sentiment, might tip the world's largest economy into recession.

"Some business is lost forever," said Mark Vitner, an economist at First Union Securities in Charlotte, N.C. "At this point, a lot of business and household decisions are being postponed. The longer it goes on, the deeper the problems for the economy."

Vitner said there's no question that reduced activity as a result of the attacks will cut economic growth in the short term, possibly driving it into the negative range for the third quarter.

Robert Brooks, a professor of financial management at the University of Alabama in Tuscaloosa, worried about long-term effects of the market closure. 

"The people who are making their living trading stocks are clearly not making any money right now," Brooks said. "But every day that it remains closed, there's more uncertainty in the marketplace and that can only lower the value of stocks and depress things further."

Analysts agree the four-day shutdown, the longest since the outbreak of World War I, has given investors time to overcome a panic that would surely have sent the stock market tumbling this past Tuesday. A handful of Wall Street gurus have even predicted higher stock prices on the opening with investors possibly staging a patriotic rally, but most are expecting a drop. 

"My own feeling is that there will be declines," Meckler said. "There are just too many companies, including financial companies here in New York, that should see material declines. The offset of that could be defense stocks and not much else."

But at the same time, experts who had initially predicted a gut-wrenching tumble in stocks once they open were tempering forecasts of gloom.

"A lot of the uncertainty about this is starting to dissipate — there is a light at the end of the tunnel for us," said Arthur Hogan, chief market analyst at brokerage Jefferies & Co.

"The fact that it's taking longer than people thought to reopen is better. We will get less of a panic. It will give us time to see how this financially affects us. I think it will be a lot less emotional and more rational."

Many analysts figure investors will have time to adjust to the crisis. The financial pros also cited the eventual benefit of the U.S. Federal Reserve's string of interest-rate cuts, which are expected to lift corporate profits by next year.

"I think the market was in a position where it was really oversold," said Woody Dorsey, a behavioral economist at research firm Market Semiotics, who bases his predictions on market psychology. "I think foreign markets gave you the harshest reaction and the shock of the trauma has occurred. I think the markets are going to rally near term." 

Reuters and the Associated Press contributed to this report.