World markets shatter Explosions near Wall Street spread consequences around world September 11, 2001: 12:03 p.m. ET NEW YORK (CNNfn) -

The collapse of New York's World Trade Center near Wall Street sent a shock through overseas financial markets Tuesday as stocks fell, oil prices surged, the dollar tumbled and money flooded into Treasury bonds.

European markets, where afternoon trading was nearing an end, fell, led by insurance stocks, as traders reacted to the early morning explosion in the U.S. that could be the worst terrorist attack in its history.

"This is a major, major act of war and act of terrorism that will have widespread economic consequences," said Jeremy Siegel, professor of finance at the Wharton School of Business, who called the financial reaction unsurprising given the crisis.

The collapse of the twin towers came after two planes crashed into New York's tallest buildings, just blocks from the New York Stock Exchange. In Washington, an explosion damaged the Pentagon and the White House was evacuated.

"We've seen a sharp sell-off, bond markets have risen strongly, equity markets have basically collapsed very, very quickly," David Thwaites, strategist at PNB Paribas, told CNNfn's Market Call from London.

Germany's electronically traded Xetra Dax went into freefall, plummeting more than 6 percent to 4,371.41. In Paris, the CAC 40 blue chip index lost nearly 5 percent to 4,174.11. London's FTSE 100 index lost 4.3 percent, reaching 4,817.5.

On Wall Street, the New York Stock Exchange suspended trading for the day. The Chicago Board of Trade and the Nasdaq Stock Market also closed.

Oil prices soared, with Brent crude jumping $3.13 to $30.50 a barrel.

Insurance companies, which could faces billions of dollars in claims, tumbled. German insurer Allianz plunged 12.36 percent.

The Israeli shekel sank to an all time-low against the dollar while Mexico's benchmark IPC index of the 35 most-liquid stocks on the Mexican stock exchange sank 5.2 percent to 5,551. In Canada, Toronto's main stock gauge fell about 4 percent.

Treasury securities, often a safe haven amid uncertainty, rose. The yield on the 30-year bond fell to 5.36 percent from 5.42 percent. The dollar fell against the yen while the euro rose.

In Hong Kong, where trading will resume in several hours, officers patrolled around the U.S. consulate.

From Florida, President Bush called the incident an act of terrorism. No immediate word was available on when U.S. trading would resume.

But Wharton's Siegel said it's important to reopen trading for symbolic reasons.

"I think we have to show the world that we are not intimidated," he said.

No information on deaths from the attacks was immediately available, but the toll is certain to be considerable.

-- Reuters contributed to this report

-- PHO (owennos@bigfoot.com), September 11, 2001