None will forget or dismiss the events in New York, Washington D.C. and Pennsylvania, but with the country in general and financial markets in particular this week returning to their past schedules, technology investors need to determine how the sector will react following the terror. If analysts are right, the raw numbers for the tech sector shouldn't change much in the long run. The attack on the core of the US financial world has economists worried about the overall picture, and not only because of the damage done directly to the financial and travel industry. With the United States girding for what could be a long campaign against terrorists, the shaky global economic picture becomes even more uncertain. Stock markets in the past often saw waves of panic selling immediately after disasters, although the Securities and Exchange Commission has eased some rules to let companies prop up their stock prices through immediate share buybacks. Whatever the overall mood, technology might not take much of a hit. "Since corporate America accounts for 80 percent of technology spending and the terrorist actions exposed key business vulnerabilities, we might see some real pending increases," said Tobias Levkovich, senior US equity strategist for Salomon Smith Barney. "While many investors, including ourselves, were having difficulty finding a bottom in information technology spending trends amidst a sea of excess capacity, the picture now has changed." Defence companies and disaster recovery companies likely will gain right away. President George W. Bush asked for $20bn immediately in military spending on top of what's in the current budget, and the US Congress could add more because government officials have been clamoring for a rapid and armed response to terrorist assaults. But defence electronics may also get a longer-term boost because the current military-industrial complex revolves around building hardware for big wars against easily identifiable enemies, rather than attacks from guerrilla groups scattered around the world. As a result, Secretary of Defense Donald Rumsfeld's previously controversial plan for military modernisation could garner more support now, analysts believe. "It should also become increasingly clear that many of the weapons the contractors currently build might not be the best ones for fighting terrorism and the enemies of today," Sam J. Pearlstein, analyst with First Union Securities. "This means we could see an acceleration of the transformation Secretary of Defense Rumsfeld has planned...We may be likely to see more spending on ISR (intelligence, surveillance and reconnaissance), precision weapons, defence electronics, NBC (nuclear, biological and chemical) defences and upgrading IT systems throughout the services, to name a few of the areas." And the post-Cold War consolidation of the defense industry means there's less contract competition than during the last major US conflict 10 years ago. Analysts cited Raytheon, Lockheed Martin, Northrup Grumman, General Dynamics, United Technologies and L-3 Communications as possible defense beneficiaries. L-3 also makes bomb-detection devices for airports, although it's only a small part of the company's overall business. Wall Street observers see much fewer dramatic effects on the rest of the tech industry. Robert W. Baird & Co. examined at least four tech-related sectors -- network technology, data storage, technology services and call centre support -- and did not change its long-term views on any of them. Because the attacks came in the last month of the third quarter, industries that normally close most of their sales in the end of a quarter could miss financial targets this time around. "Regardless, the expectations for most of the stocks have been fairly low anyway," said Dan Rounard, Baird's data storage and services analyst. Storage spending could increase as financial companies try to replace or upgrade hardware lost in the destruction, or plug storage holes exposed by the events and their aftermath. "This is a sad reminder that storage is strategic," Morgan Stanley analyst Gillian Munson said. "We think that there will be a lot of focus on strong systems vendors and backup." Deutsche Banc Alex Brown's enterprise-software and technology-services analysts didn't see much change for their industries beyond the current quarter. "There are many industries that will be more directly and dramatically impacted from yesterday's terrorist attack then the software and IT services industries," Deutsche Banc analyst Mark D'Annolfo said. One area that could be hurt are consumer tech sectors, if the terrorists have rattled consumer confidence. PC sales probably will suffer, Munson said. "Morgan Stanley's economists believe that consumer confidence will be further impacted to the negative side and we agree," she said, adding that consumers support about 25 percent of the PC market. "While we still see a benefit from the release of Windows XP, it is our sense that the take up curve will be flatter and slower than expected." As the single largest tenant in the World Trade Center, Morgan Stanley also maintained a low-key view of the attacks' economic impact: "There is some solace in returning to the challenges of our business and trying to make sense of the changed world...At this moment, however, the investment implications are, of course, subordinate to the human dimensions of this tragedy." See techTrader for the latest financial news in the high-tech sector. See the Business News Section for full coverage. Have your say instantly, and see what others have said. Click on the TalkBack button and go to the techTrader forum Let the editors know what you think in the Mailroom. And read other letters.